Can a company effectively capture and harness the raw, roaring energy from the millions of blogs, tweets, videos, and other Web 2.0/social networking phenomena surging through our organizations and markets? Even the most optimistic analysts say it will take time before a business case can be made from all this craziness.
But evidence is emerging that businesses are already starting to see direct benefits in applying Web 2.0 and social networking in their dealings with customers, partners, and between employees. McKinsey, for one, has just published the results of a survey of nearly 1,700 executives from around the world, which finds that at least seven out of ten respondents (69%) report that their companies have gained measurable business benefits from these new methodologies.
Interestingly, benefits were seen evenly across the range of corporate interactions — between employees, with customers, and with suppliers/partners. These consist of better access to knowledge (68%), reduced communication costs (54%), more effective marketing (52%), increased customer satisfaction (43%), and even increased employee satisfaction (36%).
“We are starting to see some real changes, and some initial indications that these technologies are enabling a different kind of organization — a more networked or more porous organization,” says Michael Chui, McKinsey consultant and report co-author. “We’re seeing organizations that are able to communicate and collaborate across their internal silos, and perhaps even more strikingly, organizations that are able to communicate across corporate boundaries both with their customers as well as the rest of the supply chain.”
A surprise also emerged from the data: the highest-rated technology/service for interacting both with employees and outside parties is video sharing, cited by half of the respondents surveyed. “It turns out to be a very powerful way for people within organizations to communicate with each other,” Chui says. Blogging was also cited by about half the group as the most valuable tool for interacting with employees and outside entities. About 40% are seeing results from social networking.
The more the technologies are used, the more benefits seen, the survey also shows. As McKinsey puts it:
“Web 2.0 delivers benefits by multiplying the opportunities for collaboration and by allowing knowledge to spread more effectively…. Among respondents who report seeing benefits within their companies, many cite blogs, RSS, and social networks as important means of exchanging knowledge. These networks often help companies coalesce affinity groups internally.”
Social networking and Web 2.0 also need to be managed effectively and prudently as well. My colleague Heather Clancy just posted details from a study by AVG Technologies that found while social networking is a popular tool for most businesses, relatively few take security precautions while engaging in such networks.
What can managers and executives do to increase the chances for success from Web 2.0 and social networking approaches? A key factor Chui observes from the data pertains to integrating these activities and technologies into the workflow, he says. “This applies both internally as well as with suppliers and partners,” he says. Also, “role modeling by leaders is very powerful,” he adds.
In the study, 75% of the companies reporting measurable results say they have incorporated Web 2.0 into employees’ day-to-day activities. In addition, seven out of ten with good results say they also have integrated Web 2.0 approaches with other partner or customer channels. Interestingly, those companies reporting positive payback say they have regular Web 2.0 interactions with almost half of their partners and more than a third of their customers.
Incentives make a difference as well — and they don’t have to cost much, Chui advises. “Informal incentives are much more powerful and formal incentives. It’s not that you necessarily have to pay people dollars to use the technologies. Reward them with status or other intrinsics.”
McKinsey says that more than half of the companies in the survey plan to increase their investments in Web 2.0 and social networking technologies, while another quarter don’t expect their level of spending to change. The study also suggests that the turbulent economy may have increased interest in Web 2.0 technologies.
Adopting Web 2.0 and social networking technologies is smart business because it increases the speed and agility of connecting with employees, customers, and partners — while potentially cutting costs. These approaches can be put into place incrementally as well, without the need for huge up-front investments.