Why communicative participation of employees is so important for businesses


Series: Participation in the intranet, part 2

There are at least three good reasons why many companies can benefit from increased employee participation in the intranet: used properly, it leads to an increase of productivity, agility and controllability.


After consulting firm McKinsey  had  analyzed several thousand enterprises worldwide for five years, they published a study in 2012 drawing the conclusion that knowledge workers could increase their productivity by 20 – 25 percent, if they made proper use of social software. They found that two thirds of the potential added value of social technologies resulted from improved internal communication and collaboration, leading to employee skills better finding their way to the departments where they are needed most (‘matching talent to tasks’).

It is important to note that successful participation in the intranet doesn’t only depend on technology but on quality and quantity of social interactions. While IT is necessary to facilitate the required speed and coverage of interactions, the exchange will only take place if supported by a culture of cooperation and  the willingness to participate. According to McKinsey, this willingness to participate is decisively encouraged when executives act as role models and the use of software becomes a regular part of the work process.


Participation has, however, not only the potential to increase productivity, but it can make companies much more flexible. Change management expert John P. Kotter thinks it is critical because in times of constant change hierarchically dominated management methods aren’t fast and agile enough. Hierarchical processes work well for the recurring demands of daily control of a company, but when it comes to being continually on the lookout for new solutions, they are too clumsy.

Hierarchy and network_11072015

Exhibit 1: hierarchy versus network

As a result, Kotter proposed to introduce, parallel to the traditional hierarchy, a second ‘operating system’ for companies that works like a network. While hierarchies proceed according to established rules and processes that have been optimized for the most efficient handling of known tasks, network resources can be re-assembled again and again responding to changing requirements. In a hierarchical organization, the management focuses on administration and control of the system. The management of a network, however, motivates to find new ways and  is more fault-tolerant.  In a hierarchy, communication is mainly top-down, in directives which are sent via the cascades of the organizational chart. The communication in networks on the other hand runs in dialogues that, according to requirements, may run criss-cross  through the organizaton. What matters here, is how valuable the contribution is for the new requirement, not where it comes from.

Hierarchy and network as dual operating system

Kotter’s point is not to replace hierarchies by networks, he rather wants to create a ‘dual operating system’ in which both organization models complement each other. Reliable day-to-day business and ongoing innovation should be able to coexist. The participation of employees plays a crucial role for the success of the network. To allow for rapid change, Kotter recommends  to involve as many employees as possible on a voluntary basis. Volunteers set to work with a ‘I want’ instead of ‘I must’ attitude and contribute to cost-containment to boot. In return, they want to be involved in change, not only be affected by it. To this end, it is necessary to exert a leadership style that  works with motivation and appreciation instead of delegation and budget control. According to Kotter, leaders on all levels must be involved to establish the network as legitimate part of the organization.

I consider Kotter’s approach very productive because it reflects the reality of business. Every business needs hierarchies to remain efficient and capable of making decisions, especially when it has reached a certain size. And every business needs network structures in order to adapt to the ever-changing environment. Kotter presents a model in order to mediate this conflict of objectives and illustrates the crucial role of participation for companies to cope with the constant pressure to change.

However, what Kotter describes as ‘dual operating system’ also seems to be dualistic, because network and hierarchy are working  in parallel without being truly integrated with each other. The connection between the two is primarily  based on the personal union of employees  who play a role in both systems and as a result have to settle the conflict of objectives in themselves. I believe that decision making hierarchy and networking culture can be reconciled in another way and by doing so improve the controllability of the organization.


Increased employee participation allows for management to gain new insights into the state of things and based on that for making more informed decisions. More informed decision making improves the controllability of the organization as a whole, but it also brings a new quality to communication controlling in particular, because with participative internal media it can be measured how messages resonate in the organization.

Closed loop of internal communication

Exhibit 2: Closed loop of internal communication

Exhibit 2: Closed loop of internal communication

Traditional internal communication mainly serves as the mouthpiece of the executive board. It shapes messages dealing with the ‘targets’, the goals and plans that management want to reach with the organization. And it coordinates the distribution of these messages along the hierarchy, from top to bottom, through the cascade and traditional internal media such as the staff magazine. While this management of messages is well tested and established, internal communication so far had little opportunity to find out how they resonate in the organization.


With the participation opportunities enabled by social software all this has changed. Now it can be determined how much of the messages has actually come through and where there is still need for reinforcement. Horizontal networking makes opinion-shaping processes visible which were in the dark before . With employees openly cooperating on the same project or exchanging views on the same field of interest (‘peer-to-peer’), new internal publics emerge which serve as means for knowledge exchange but also show where the organization stands with its projects. Depending on the internal social media landscape, the actual state of things can directly emerge from observing the exchange or can be purposefully collected as social intelligence from the bottom up. Thus a targets-actuals comparison is facilitated that shows how far apart plan and reality are and what is needed to close the gap between the two. Through the communicative participation of employees a loop is generated that makes the internal communication significantly more controllable than it was with a silent audience.

However, participation in the intranet doesn’t work like grasssroots democracy. There are different levels of participation and formats with active influencers and more passive followers. Internal communication has to adjust to that with appropriate models of participation, and we’ll look into those over the next couple of posts in this series.

Participation in the intranet


Introductory post to a series on status, motives, levels and formats of participation in the intranet

Pressefoto der Techniker Krankenkasse für redaktionelle Zwecke.

Source: CC BY-NC-ND 2.0, flickr user: TK Presse

Participation is an issue of our time. Citizens and consumers who used to be silent audiences today raise their voices on the Internet: Be it on companies and products, on public infrastructure projects or on the precarious relationship between church and modern society. They not only do this because the Internet has become a participatory medium, but because participation is part of the lifestyle of individualized societies.

Individualization and flexibility

Institutions in politics, business and society have lost much of their lead on the interpretation of our lives. Over the last decades, the individual has obtained more and more space to shape for herself. However, in an environment where nothing seems to be irreversible, there is also higher pressure on the individual to take more responsibility. For example, in the welfare state the safety of guaranteed pensions is increasingly being replaced by the expectation to plan for private care. And even large companies – once a haven of stability – keep reinventing themselves under the pressure of global markets and require their staff to stay flexible.

From affected to involved

Those affected by the constant change also want to be involved in shaping it, or at least they need to understand at all times, what, when, and why it happens. The only question is: how much of this participatory spirit has arrived inside organizations, in internal communication and in particular on the intranet? The social intranet certainly has been established as a software product, but how much participation has actually entered the technology, culture, business and communication of our companies?

At the end of the beginning

According to the global 2014 Social Business research report by MIT Sloan Management Review and Deloitte, 73% of respondents said that social business is important or

Social Business Maturity level of respondent companies. Source: 2014 Social Business Global Executive Study and Research Report by MIT Sloan Management Review and Deloitte

Social Business Maturity level of respondent companies. Source: 2014 Social Business Global Executive Study and Research Report by MIT Sloan Management Review and Deloitte

somewhat important to them today. Nearly 90% saw its importance on a three-year horizon. So clearly social intranets have arrived on the mainstream agenda, but there is still much to do before they can reach their full potential. Companies wanting to benefit from social communication and collaboration, must reach the appropriate level of “social maturity”. However, only 17 % of the survey respondents saw themselves already on a maturing level, whereas 51 % were at an early stage and 32 % still developing (see graph). Summarizing the current situation it might be fair to say that we are at the end of the beginning: the majority has realized that this is going to happen, but only few have come far enough to reap the benefits.

Time for method

At the end of the beginning, we still have a long way to go, but we have come far enough to do more than experimentation. It is time to go beyond trial and error and use our learnings for a more methodological approach. This series of posts is meant to help with that by working through the following questions:

  • Why is more participation for companies and their communication so important?
  • What does participation mean for the organization and communication model of a company?
  • How does hierarchy get along with network structures?
  • How does traditional internal communication fit together with participation?
  • Which levels of participation do exist on the intranet?
  • What role do social ties between employees play for online participation?
  • Which participation formats are there and what can we expect from them?
  • And finally, what are success factors we have to consider?

Please note: This blog post series is an edited, updated and translated excerpt from an article that was first published here: Dörfel, Lars (ed.): Instrumente und Techniken der Internen Kommu­nikation. Band 2. Berlin 2013. S. 29-50. A German version of the series can be found on the blog of Klenk&Hoursch.

Georg Kolb

We need to change our perspective on the use of Social Intranets


I recently wrote a piece for i-com, journal for interactive media. It calls for a new perspective on the use of social intranets, because for too long we made the wrong assumption that social networks at work would follow the same social dynamic as the private ones. But they don’t, and it shows: the adoption rates of many new enterprise social networks are embarrassingly low.

For social intranets to deliver on their productivity promise, we need to bring together four factors shaping the social world of work: business rationale, corporate culture, technology infrastructure and internal communication. And we need to build this integration into the workflow of social intranet teams by establishing a cross-functional body steering the project. All of these four factors are necessary, and only all four together are sufficient to make social intranets work, because they determine how we work together, or not.

If you think that makes sense and want to learn more, you can buy the full article here. (It’s not exactly cheap, I’m afraid.)

Georg Kolb

Ancient lessons on focus for the digital world


20130430_Hamlet's_BlackBerry_CoverReviewing “Hamlet’s BlackBerry”, a book by William Powers

Abstract: Computers have made our lifes easier connecting us to people and content in the outside world, but permanently managing this connectedness makes us also suffer from busyness and lack of focus. William Powers reaches out into the past seeking for guidance from thinkers who struggled with similar issues. New media have always created this ambivalence between enrichment and deprivation, and Powers has found seven thinkers reflecting on this in some way: Plato, Seneca, Gutenberg, Shakespeare, Ben Franklin, Thoreau, and McLuhan.

A book on anything related to the digital age can rapidly become outdated. “Hamlet’s BlackBerry” by William Powers came out in 2010, but the only thing the author would have to update is the name of the device in its title. Today, it would have to be Hamlet’s iPhone or Android, since the BlackBerry has lost its glory as the leading gadget.

The issue the book presents has only become more current, since it was published. It is about the conundrum of connectedness, as the author calls it: our computers and mobile devices have made our lives easier in many ways by connecting us with content and people in the outside world, but they also make us incredibly busy permanently managing our connectedness. As a result, we often struggle to focus on the important things and lose depth in what we do.

As a former staff writer of The Washington Post who has written on media and technology, Powers doesn’t simply blame the tools for making us busy. He understands that it’s us keeping ourselves busy with the tools. So, he argues, we need a new way of thinking about the tools, “a new digital philosophy […] that takes into account the human need to connect outward, to answer the call of the crowd, as well as the opposite need for time and space apart. The key is to strike a balance between the two impulses” (p. 4). I would certainly support this insight, but it’s neither new nor interesting enough to warrant the time reading 267 pages.

What makes the book interesting is that Powers reaches out into the past seeking for guidance from thinkers who struggled with similar issues. New media have always created this ambivalence between enrichment and deprivation, and Powers has found seven thinkers reflecting on this in some way: Plato, Seneca, Gutenberg, Shakespeare, Ben Franklin, Thoreau, and McLuhan. What kind of advice can they provide to our always-on generation suffering from busyness and lack of focus?

Most of their solutions involve the creation of distance needed so as to separate ourselves from the crowd and give room to reflection and focus on what is really relevant. For the oral culture in Plato’s (428/427 BC – 348/347 BC) age, connectedness was about being busy talking with people in the city. Powers calls Plato’s “Phaedrus” to witness how physical distance from the crowd helped orators to refocus and how the invention of written language helped to offload information, freeing speakers’ minds from permanent memorizing.

However, being away from it all doesn’t help when the crowd follows you on your mobile device. If you can’t escape the noise outside, Seneca (ca. 4 BC – AD 65) offers a technique to create distance from the inside. Surrounded by the noise of ancient Rome, Seneca managed to create inner distance through the act of writing, impressively documented in the letters to his friend Lucilius. Writing allows for a private experience of reflection, but it also needs the discipline of a Stoic “to force […] [the] mind to become self-absorbed and not let outside things distract it”, as Seneca put it (101).

Similarly, silent reading opens the gate to inner reflection and the development of individual thinking. However, as Powers points out, for many this introspection was first enabled by Gutenberg’s (1400-1468) invention of the printing press. And it took even three hundred years more before general alphabetization took hold and large numbers of people were enabled to go on an inner journey through private reading and writing. Nowadays, with both media consumption and production becoming more and more a social experience, it is worth remembering what an achievement it was for humanity to allow for privacy in this process. Today, on the very devices we are using to read and write, a stream of notifications on what other people “like” and think is continuously interrupting our privacy before we can finish our own thoughts.

We shouldn’t blame the devices, though; they are as much part of the solution as they are part of the problem. Take for instance Hamlet’s BlackBerry, as Powers calls a gadget which was fashionable in the Shakespeare (1564-1616) era. It was an erasable tablet to take notes people used to better manage their busy lives. While it might come as a surprise to us inhabitants of the World Wide Web, we are not the first suffering from information overload. Many of Shakespeare’s literate contemporaries felt unable to cope with the amount of information newly spread by the printing press. So, they used these carry-on tablets to keep track of pieces of information they didn’t want to lose on the way. At the same time, information not standing the test could be wiped out: “In an epoch when so many words were committed permanently to the printed page – more than any one mind could handle – this gadget moved in exactly the opposite direction” (p.151). Ultimately, Hamlet’s BlackBerry was a tool to manage your memory, clearing the busy mind and finding what really matters.

Tools and techniques can be very useful, but only when guided by the right judgment. Powers found three more historical sources to help with that: Benjamin Franklin, Henry David Thoreau and Marshall McLuhan.

“All new tools require some practice before we can become expert in the use of them”, Ben Franklin (1706-1790) once wrote (173). It is not uncommon that we overdo things when they are new. We overdid e-mail and we are currently overdoing social communication. Prohibition is a typical reaction to that: as a result, we have seen “no e-mail Fridays” and we are now seeing social websites being blocked by employers. The issue with prohibition is that it’s just a negative statement, it doesn’t provide a positive incentive for change of behavior, and it doesn’t acknowledge the good in habits, if and when not overdone. Ben Franklin understood that and created a pragmatic approach accentuating the gains when stopping things rather than threats or punishment. “You have to see that there is more to be gained by resisting the impulse than giving in” (p. 165), Powers summarizes. Franklin was a very social person and easily distracted by the many things on his mind. To keep himself focused, he created a list of 13 virtues to live by, combined with behavioral guidelines for attaining them. I’d like to quote the first two, since they would dramatically improve social online communication, if we would follow them (166):
1. Temperance: Eat not to Dullness. Drink not to Elevation.
2. Silence: Speak not but what may benefit others or your self. Avoid trifling Conversation.
Franklin also walked that talk. For the rest of his life, he carried his list of virtues everywhere and for years he even tracked on how he did against them. Some of the best social media policies we know work in a way similar to Franklin’s list of virtues, and I believe that his pragmatic approach would benefit our online activities more than any kind of prohibition.

While Franklin created an inner compass with his list of virtues, Thoreau’s (1817-1862) strategy worked from the outside-in. At a time when railroad and telegraph drastically increased the complexity of life by connecting people to a degree unknown before, Thoreau felt a simplified lifestyle was needed to recover depth. He spent two years in a one-room cabin near Walden Pond, only three miles away from his hometown Concord, Massachusetts. Rather than completely withdrawing from his previous life, he boiled it down to its essentials. “[…] the Walden project was really an exercise in practical reengineering”, says Powers (p. 189). With connectivity rising, there is a danger to get caught in a network of distractions tying us to the surface. Powers quotes from a speech of Thoreau:

“Surface meets surface. When our life ceases to be inward and private, conversation degenerates into mere gossip. […] In proportion as our inward life fails, we go more constantly and desperately to the post-office. You may depend on it, that the poor fellow who walks away with the greatest numbers of letters proud of his extensive correspondence has not heard from himself this long while.” (p. 187-188)

Today, many gaze in admiration at the number of “friends” they have on social networks, but the number of those who feel lost in the chatter is rising, too. At Walden Pond Thoreau created a retreat remote enough for him to cut out the noise and reopen space for privacy and reflection. With today’s mobile networks reaching even the farthest places, a cabin out of the city won’t necessarily have the same effect, but Thoreau’s lesson is more subtle anyway: it is a practical lifestyle decision to reduce complexity and simplify your life to regain focus, whatever is needed to make that happen.

Marshall McLuhan (1911-1980), the last thinker Powers presents in his book, brings a new perspective to the discussion. Rather than trying to inhibit unwanted media effects, he focused on how the media works. McLuhan viewed groundbreaking technologies such as the printing press as an extension of the human senses, changing human behavior to a degree that resulted in a new type of human being. Powers summarizes:

“Gutenberg’s invention had created what McLuhan called Typographic Man, whose mind operated in a linear, objective fashion that fostered individualism. Equipped with this left-brain way of thinking, this being had thrived for centuries and built up Western civilization. But McLuhan said he was about to be replaced. Because mass electronic media work on us in a different way from print, those technologies were creating a new person whose mind was less linear and individualistic, more group-oriented. In the future, he predicted, our minds would operate more like the oral mind of Socrates’ era.” (p. 198)

McLuhan thought that this shift had started with the telegraph, the first technology that extended the human central nervous system out into the world, connecting potentially everyone and everything happening across the planet. Today, over 2.4 bn people are interacting on the internet. With mobile computing growing aggressively and now getting even closer to the body through wearables such as Google Glass, there is yet another layer of connectivity on the horizon. While the Typographic Man was drawn into the inner world of private reading, the citizen of the Internet is never alone, the crowd is always with him influencing the way he thinks, even while reading. In this regard, today’s netizen is indeed in a similar situation as the oral mind of the Socrates era. Like on the agora – the central gathering place in ancient Greek cities where social, political and commercial matters were discussed – everyone has a voice on social networks. But many voices can create a lot of noise and an overload of information, so that it’s hard to focus on what is relevant. As in our first case above, Plato conveyed in his Phaedrus how Socrates left the city to cut off the crowd, so that he could focus on the task at hand, and how he discovered scripture as a way to offload his mind from memorizing everything.

By reflecting on the history of the media McLuhan helped us to understand media effects and better deal with them as a result. By writing “Hamlet’s Blackberry” William Powers acted in the spirit of McLuhan, providing some powerful historical cases for us to consider when struggling with unwanted media effects in our time.

However, it also has to be said that Powers doesn’t deliver on the mighty promise in the subtitle of the book “A Practical Philosophy for Building a Good Life in the Digital Age”. From a systematical perspective, Powers didn’t develop a concept for right or wrong conduct or a clear idea of what a good life in the digital age actually means. From a historical perspective, the selection of cases seems eclectic and anglophile. Other than McLuhan, media theorists of the 20th century – such as Walter Benjamin, Gilles Deleuze or Niklas Luhmann to name but a few – are not even mentioned. The whole book is written from a single user perspective, there is no analysis of social dynamics or power structures in media. It looks more like the personal quest of William Powers looking for help in his own struggle with the Internet crowd. And he did walk his talk, trying some of the strategies he described in his own life. Which is all fine, it is just not “a practical philosophy for building a good life in the digital age”.

Nevertheless, with the right expectations set, I do recommend this book to all who feel overwhelmed by their online connections to the crowd. Powers’ journalistic skills made it an easy read providing access to some classical theories and the practical guidance they have to offer today.

Georg Kolb

The new tone on social media ROI: from anecdotal evidence to systematic analysis


Abstract: After the review of five recent studies on social media ROI, it seems we are entering a new phase in dealing with social media professionally. Since the corporate use of social technologies is going mainstream, we are now getting enough data to make the leap from anecdotal evidence to systematic analysis. And clearly, data shows there are some lessons to be learned, since businesses had pretty mixed returns on their social technology investments so far. Pain points are a lack of economic metrics, confusing technology options in a rapidly evolving software environment, and insufficient integration into the workflow of organizations. Critical for success is not only the right choice of technology, but its combination with an open corporate culture and a focus on business results.

In February 2012, six years after his seminal paper on Enterprise 2.0, MITSloan Management Review asked Andrew McAfee, if there is “evidence yet that there are competitive advantages that come from doing Enterprise 2.0” and got the following response:

At the company level, it’s an incredibly hard research question to answer, because you’ve got to, first of all, identify who’s good at it; then you have to isolate all the other things that could be affecting their performance; and then you have to watch them for long enough to see if their performance improves. So, no, I don’t have bulletproof academic research yet that will demonstrate that this stuff leads to superior outcomes at the level of the firm.
But even if you can’t demonstrate with bulletproof research that competitive advantage comes, go back to Lew Platt’s challenge, “If only HP knew what HP knows, we’d be three times more productive.” Do they think they’d be better off knowing what their company knows? The answer is almost always yes.

So, there you have it. We still don’t have scientific proof for the ROI of social media, but it just seems to make sense and there is also anecdotal evidence that corporate use of social media pays off. Most people have probably heard of some extraordinary social media marketing case studies such as the Old Spice Guy or of IT companies such as IBM that put Enterprise 2.0 into practice. But there are also nagging doubts that examples like these might be singular cases surrounded by a lot of hype. While we are still waiting for that “bulletproof academic research”, we are are starting to see studies with a broader data foundation. Here is a selection of five noteworthy updates over the last six months that provide a pretty consistent view on where we are with social media economics:

  1. November 2011: McKinsey’s fifth annual survey of 4,261 global executives on “How social technologies are extending the organization“.
  2. December 2011: The Social Intranet Study 2011 by Toby Ward of Prescient Digital Media, based on a survey in collaboration with the International Association of Business Communicators (IABC) which was completed by 1,401 participants in small, medium and large organizations in all types of industries, from across the globe.
  3. February 2012: Altimeter Group, an “advisory firm for disruptive technologies”, published a report “Making the Business Case for Enterprise Social Networks“. This  report is based on an online survey of 185 professionals from various industries and backgrounds involved in the management or deployment of their corporate Enterprise Social Network and qualitative interviews among corporate practitioners, IT and communications leaders and senior executives of several Enterprise Social Network vendors and end users.
  4. April 2012: A study on “The Economics of the Socially Engaged Enterprise” by management and digital consulting firm PulsePoint Group which is based on a survey by The Economist Intelligence Unit among 328 senior executives in the US.
  5. May 2012: Google published a study on “How social technologies drive business success“. They had commissioned this study with Millward Brown, gathering opinions from 2,700 professional users across France, Germany, Italy, the Netherlands, Spain, Sweden and the UK.

After reviewing these studies, I have come up with four insights that were also consistent with my own experiences with social media project work over the last years.

1. Business use of social media has gone mainstream

Exhibit 1: Social Media adoption in companies. Source: McKinsey Quarterly 11/2011

Like it or not, it has become a matter of fact: social media adoption has gone mainstream. Seventy-two percent of the respondents to McKinsey’s latest global survey (Nov. 2011) reported that their companies are deploying at least one social technology, more than 40 percent said social networking and blogs are now in use (McKinsey, p.2, see also exhibit 1).

Prescient’s Social Intranet Study (Dec. 2011, p. 4) found that 61 percent have at least one social media tool available to some or all employees, the most popular tools being blogs, discussion forums, instant messaging and wikis.

Exhibit 2: Enterprise Social Network Goals. Source: Altimeter Group Report, Feb. 2012

People know from their personal lives how social media helps them to connect with others they share an interest with. So, it doesn’t come as much of a surprise that enterprise social networks are anticipated to improve collaboration and the flow of information (see Altimeter Group’s findings in exhibit 2). Many of today’s  professionals simply expect that they are allowed to use  tools at work they’ve grown accustomed to at home.  And if businesses don’t provide corporate social tools for their employees to use, they often use external ones. Google’s recent user survey across EMEA (May 2012) found that “almost half (46 %) of professionals want to make greater use of social tools: A third (32%) are using external social media, such as Google+, Facebook, Twitter or LinkedIn, for work related purposes every day. A quarter (23%) are using in-house social tools (set up for use by people within the business) daily, over a half (57%) use them at least once a week” (p. 2).

According to Prescient’s study, one reason for the rapid adoption of social intranets is that the cost of deploying social tools is relatively low: “[…] nearly half (38%) of organizations that have deployed intranet 2.0 tools have spent under $10,000 doing so; another 24% have spent under $10,000 – $50,000. However, the low cost of entry comes with a risk, and a potential cost” (Prescient: Social Intranet, p.5). It is often underestimated how much effort is still needed when the social technology is up and running. As a matter of fact, my own experience told me that many social media projects fail when only managed from a technology perspective.

2. So far, businesses have had mixed results

When it comes to results of social media use, responses from Prescient’s Social Intranet Study (Dec. 2011, p. 5) send mixed messages: 30 percent of organizations rated their overall satisfaction as good or very good, but as many as 26 percent as poor or very poor. Even more worrisome, only 28 percent of executives rated their overall satisfaction as good or very good, but 35 percent rated the experience with their social intranet as poor or very poor.

Exhibit 3: Social Business Maturity. Source: Altimeter Group Report, Feb. 2012

Altimeter found in their report (Feb. 2012, p. 5-6) that many organisations failed to meet expectations with Enterprise Social Networks, often indicated by one or more of the following scenarios: a) Initial enthusiasm is followed by slow decline, b) only one department really embraces the network, c) there is confusion on how “personal” (as opposed to work-related) the business network can be, d) the corporate culture hasn’t matured enough to understand, appreciate and leverage an enterprise social network. In fact, two out of five companies Altimeter surveyed were still beginners (6 %) or just running trials (33 %) without a formal strategy (see exhibit 3).

Exhibit 4: Four types of organizations. Source: McKinsey Quarterly, 11/2011

McKinsey clustered the types of organizations by the benefits they reaped from their social media use and tracked how they did over time. They distinguish between “developing”,  “internally networked”, “externally networked”, and “fully networked” organizations, based on the average mean improvement reported across the different benefits when social tools were used. McKinsey define fully networked enterprises as those with an improvement greater than 10 % when social media is used to interact both externally and internally. Externally networked are those with at least 10 % improvement when social media is used to interact with customers and partners. Internally networked are those with at least 10% improvement when interacting with employees. Organizations with less than 10 % improvement are classified as developing enterprises (see exhibit 4). As many as 78 % out of the 3,103 companies McKinsey surveyed were rated as developing organizations, approx. 12 % were rated externally networked, 7 % internally networked and only 3 % fully networked. According to McKinsey’s findings, it’s not only hard to achieve  success with social media, but even harder to keep it. Between 2010 and 2011, “Roughly half of the internally and externally networked enterprises slid back into the category of developing organizations; that is, they did not maintain the benefits of using social technologies that they had achieved earlier. Less than 15 percent of the companies in any given category moved up to the next tier […]. It appears that it is easier to lose the benefits of social technologies than to become a more networked enterprise, which suggests that significant effort is required to achieve gains at scale” (p. 7).

Exhibit 5: The Six Profiles of Socially Engaged Enterprises. Source: PulsePoint Group: The Economics of the Socially Engaged Enterprise, April 2012, p. 8)

PulsePoint Group’s sample size (328) was much smaller than McKinsey’s (4,261), and it was US only rather than global. However, like with McKinsey, Altimeter and Prescient interviewees reported mixed results. While PulsePoint calculated an average return on social engagement of 3-5 %, the most engaged companies achieved 7.7 %, which was four times the return of the least engaged (1.9 %). PulsePoint recognized six different patterns of social engagement. 14.6 % fell into the category of those with highest engagement and highest return, 18.5 % in the lowest category, the rest somewhere in between (see exhibit 5).

What is it that makes such a difference when using social media? Let’s first look at some major pain points and then at critical success factors.

3. Major pain points are lack of metrics, confusing technology options, and insufficient integration

Exhibit 5: Roadblocks to Deeper Social Engagement. Source: PulsePoint Group: The Economics of the Socially Engaged Enterprise, April 2012, p. 4)

According to PulsePoint Group’s survey, senior executives in the US made it clear enough: the single biggest roadblock to deeper social engagement of businesses is the inability to prove ROI, followed by legal or regulatory concerns (33 %) and a lack of strategy for change (32 %) (see exhibit 5).

One of the reasons why businesses don’t see the ROI is that they use the wrong metrics. Altimeter found that companies measure user engagement or frequency of use rather than business impact of their social networks.  This will certainly change, since  companies responding to Altimeter also felt that they measured the impact poorly (p. 7-9, similarly PulsePoint, p. 7)). Interestingly, one of the main reasons for this poor measurement might be that “[…] investments in ESNs [Enterprise Social Networks]  have been low — two-thirds spent less than $100,000 on their ESN in 2011, with no plans to spend significantly more in 2012. Thus, the pressure to provide concrete proof of value creation or ROI isn’t as present as other technology deployments” (p. 8).

Exhibit 6: Technology Scenarios for Enterprise Social Networks. Source: Altimeter Group Report, Feb. 2012

Another pain point Altimeter Group identified is the multitude of technologies available. When setting up an Enterprise Social Network, there are not only many standalone solutions on the market, networking features can also be included in collaboration platforms or enterprise application suites (see exhibit 6). Whatever the approach is, the main question to be considered is how to integrate the social network with all the other applications. That is not only true for the technology environment, but also for the workflow: “The likely scenario is for enterprise social networking to be integrated into the enterprise platforms we are already using, ranging from Outlook, to Office, to back-office business apps” (Altimeter Report, Feb. 2012, p. 11). Finally, the full power of social media will only be released, if everyone who needs to contribute has easy access, including those who are not used to social applications and those who don’t work in a desk environment (Altimeter Report, p. 12).

4. Critical success factors are economics, culture and technology

Based on the studies reviewed for this post and consistent with my own project experience, I see three critical success factors for corporate social media projects: economics, culture and technology. They are interdependent: each of them is necessary to allow for success, but only all of them together are sufficient to achieve it.

In terms of economics, it is critical to set a foundation with business relevant objectives and metrics. Altimeter Group have rightly argued that it’s necessary to go beyond the technology perspective, so as to release the business value of social media. They recommend to focus on communication and relationship gaps constraining information sharing and decision making within an organization. Some of these gaps can be bridged with social media which creates measurable value (cf. Altimeter Report, Feb. 2012, p. 12-16). As a result, rather than measuring technology usage, metrics should focus on business improvements achieved, e.g. the increase in sharing of best practices across a large organization.

PulsePoint expect based on their survey “that benchmarks (33%) and key performance indicators (30%) will be the top approaches for measuring social engagement in the next two years” (p. 2). When it comes to the business areas where social technologies can have the highest impact, PulsePoint found that companies expect more return from sales and product development than from brand reputation (p. 3).

The emphasis on business relevance is not only important to win over those 45 % of CEOs who still don’t see enough proof of value in social media (see 3. above on pain points), but also to get the buy-in and commitment of users. They need to feel that using social media is not just another time killer, but a source of value as they might have experienced it already  in private use. As such, social media use for business must not be an option for play through downtime periods but has to be closely integrated with daily work. McKinsey found that those organizations where social technologies were highly integrated into employees’ day-to-day work reaped the highest business benefits (p. 5, see also exhibit 4). For instance, if you can avoid reinventing the wheel in your daily work by learning from remote colleagues you haven’t been connected to before, you will experience the value and be encouraged to share your own knowledge.

Another important aspect of social media economics is that it has to be properly resourced. As already mentioned above (see 2. on mixed results), McKinsey found that it takes serious effort to gain and maintain benefits from the use of social media. The resources needed for social media success are often underestimated, because technology deployment is the only expense considered. However, the value isn’t created by the technology only but by the relationships between people using that technology. And relationships always need time, nourishing and development. Ultimately, community management is more important than top-notch technology features, because users will rather forgive some lack of comfort than lack of relevance for their interest.

That said, technology is still the necessary enabler. Google’s recent EMEA survey  confirmed that professionals want to make more use of social technologies to support their work, and if they don’t find them inside the organization they might use them outside (see above, 1. Business use of social media). More than that, those frequently using social media are most likely to be succesful in their jobs and work for high growth companies: according to Google’s report (May 2012, p. 5), “80% of high growth companies are using social tools to improve ‘connectivity’ (such as collaboration and knowledge sharing)” and “86% of frequent users have recently been promoted, 72% say they are likely to be promoted, compared to 61% and 39% of nonusers”. Providing these people with tools they like to work with can give a boost to their energy and make them multiplicators inside the organization. They just need to get technologies that will really help them do their job. For that, it’s more important to get the basics right than to indulge in features, and – as Altimeter Group pointed out (see above, 3. on pain points) – the social platforms need to be integrated with other business tools. E.g. it shouldn’t be hard to transfer content from one tool to the next, and the workflow should be linked naturally. So, the decision on technology shouldn’t be made just based on cost and features, but within the context of the enterprise environment it has to be integrated with, in terms of the workflow and the human resources needed to develop relationships.

Last but not least, even the best integrated tools and the best business metrics in the world won’t guarantee success with social technologies, since they need to be accepted socially before becoming useful. And this often creates a challenge to the corporate culture. As the Altimeter Group have put it: “Social represents a fundamental change, simply because, at its essence, it encourages sharing.” (p. 12) Sharing means open accessibility and exchange of information, often also called transparency. It is feared by many organizations, mostly for two reasons: It goes beyond organizational boundaries because it is based on interest rather than hiearchies. And it opens the door to public criticism. So, for good reasons both Altimeter (p. 18-19) and PulsePoint (p. 2, 6) have highlighted two success factors for social engagement: organizations need to learn how to deal with open critique, and leadership must champion the use of social media.

Against all odds, permitting negative comments by employees or customers and addressing them in the open makes businesses stronger, since it proves how an organization can learn and is taking their constituents seriously. The fear that critique might be abusive is in most cases not warranted because communities can be effectively moderated by guidelines and will also self-police behavior (Altimeter Report, p. 18-19).

However, this openness will only work when supported by top-executives. They are the catalyst for change. They need to encourage sharing and show their belief that it makes their organization better. It is also important to understand that openness is not an end-in-itself. Openness enables sharing across organizational boundaries, so that people can connect and collaborate where they otherwise wouldn’t. However, once people have found each other based on their interest or expertise, they will refocus in more private groups. This is a great point Altimeter made in their report (p. 14).  An open corporate culture doesn’t mean that everyone shares everything all the time, it just means that people are allowed to connect and collaborate based on their interest rather than defined by organizational silos. Since executives are the guardians of organizational boundaries, they need to show that they are okay with that and participate in the effort. Executives using social technologies will endorse the culture needed to reap the economic benefits everyone expects.

Georg Kolb