A second look at the facts and fiction of Social Business

In 2011, the US hit a milestone — more than half of all adults visit social networking sites at least once a month. But when it comes to using social-networking technologies inside organizations, many business leaders are at a loss to understand what value can be created from Facebook-like status updates within the enterprise. Some organizations have deployed social-networking features with an initial enthusiastic reception, only to see these early efforts wither to just a few stalwart participants. The problem: Most companies approach enterprise social networks as a technology deployment and fail to understand that the new relationships created by enterprise social networks are the source for value creation. In this first of two reports, Altimeter looks at four ways enterprise social networks create value for organizations.

While I think we should recognise the limitations of the Altimeter survey (i.e. the small sample, a variety of organisational/business units sizes and geographies mixed in the results) there are definitely some interesting points to reflect on in this free report (and thank you Altimeter for sharing both the report and the data).

However, I think looking at this report and reflecting on Sameer Patel’s reaction, I think he is painting an overly gloomy picture of ‘social business’ because it hasn’t (yet) come up with a set of generic spend x on software y and we promise you’ll receive z. (ok I’m paraphasing – read Sameer’s post and then read the rest of mine!)

Firstly, no-one in this survey felt that that were measuring the impact of ESNs “very well” (31% said somewhat well and the rest either somewhat poorly or very poorly). Further, many of the measures reported are highly questionable, particularly if used in isolation – e.g. % of employees using it.

Secondly, we have no data here that indicates either how they approached the deployment of these tools or how well they rated the effectiveness of the approach taken. The assumption is that they have all deployed them 100% effectively.

Finally, we have no benchmark data for organisational performance for both organisations attempting to become social businesses versus those that haven’t.

I’ve mentioned before some research in Australia that reported how high-performing workplaces are up to 12% more productive and three times more profitable than their peers. However, only 15% of organisation in Australia exhibit management practices that support this – these are: being highly responsive to changes in customers’ and suppliers’ circumstances, encouraging high employee participation in decision-making, achieving on-the-job learning through mentoring and job rotation, making effective use of information and technology and attracting and retaining high quality people.

But since the benefits are clear in bottom line terms, why aren’t organisations falling into line behind these practices?

In a way, I think I agree with many of Sameer’s points but its a stretch to write off Social Business based on this data alone. Really there is whole bigger and more complex picture to understand around what makes organisations more productive or effective that we actually don’t understand that well.