There might be more than a billion people using social media tools like Facebook, Twitter and Instagram, but most businesses are just beginning to figure out how social technologies can benefit their organizations.
A new research report Social Business: Shifting Out of First Gear from MIT Sloan Management Review and Deloitte demonstrates the growing importance of social media to business and the difficulties organizations have with using social tools to create business value.
The report’s focus is on social business, a term the authors apply to an organization’s use of social technologies and platforms, a group that includes internal collaboration platforms designed specifically for organizations (like Yammer and Jive) as well as social platforms that weren’t originally designed for organizations (like Facebook and Orkut). Among the report’s key findings:
- The importance of social business is growing: In surveys conducted in 2011 and 2012, the percentage of business executives who agree that social business is “important today” to their organizations doubled from 18 percent (2011) to 36 percent (2012).
- Executives believe social business is an opportunity to change the way we work. 70 percent of chief executive officers, chief information officers, and chief marketing officers agreed that social business is an opportunity to fundamentally change the way work is done in their organizations.
- However, few companies have well-developed social business capabilities. More than half of all executives surveyed rank their companies a three or below on a one to ten social business maturity scale.
- Several obstacles tend to block the development of social business. The top obstacles include: lack of an overall strategy; too many competing priorities; and lack of a demonstrated business case or strong value proposition.
The report also found that creating business value with social media often demands strong executive leadership, as adopting social business platforms involves more fundamental changes to workflow than adopting the next iteration of a word processing program.
Companies that generate more value with social business tend to have leaders who support the use of social tools to meet important business objectives. A key part of that process, the report suggests, is ensuring that social business tools and social data are valued and integrated into multiple functions, a pattern of activity that often involves changing the way people work.
Social Business: Shifting Out of First Gear notes that the importance of social business is increasing, albeit unevenly, across all industry sectors. It is no accident that social business is beginning to find its place on the corporate agenda as consumers increasingly connect with each other and the business sector via social media channels. But as more organizations develop their own social business capabilities – to better serve and compete for customers and to improve their own operations – the competitive landscape for many companies is likely to change.
Indeed, many executives cited in the report echoed the words of Gerald Kane, a professor in the Carroll School of Management at Boston College, who is quoted in the report’s introduction: “Any new technology experiences a faddish hype cycle where people adopt it because they feel they have to. With social, we are passing the peak of faddishness. Companies are starting to crack social’s code and turning to it for business advantage, intelligence and insight.”
David Kiron is the executive editor of MIT Sloan Management Review‘s Innovation Hubs. Visit MIT Sloan Management Review to read the full report or for more information on the MIT SMR/Deloitte joint Social Business Project.