Monday, June 4

Fostering Change: Social Business Research

A new research report by the MIT Sloan Management Review in collaboration with Deloitte suggests there might be more to the social business concept than most people think. In addition to a survey, the study includes supplemental case studies from companies like McDonald's, IBM, Salesforce, SAP, and Yammer that are putting the practice to work.

According to the report, 52 percent of survey respondents believe that social business is important to their business today and 86 percent of managers believe social business will be important within the next three years. The only holdback to the enthusiasm is that executives still don't feel comfortable with the metrics that might prove value.

The researchers, on the other hand, make the case that metrics might not be as important as some people believe. While metrics are important to make assessments, the outcomes transcend measurement in improving operations, innovations, and humanization.

The social business movement is being led by media and tech companies. 

Not surprisingly, the businesses that seem to be leading the way in developing a social business structure are media (entertainment, news, and publishing) and technology (IT and tech). Among the media industry, more than 74 percent of managers already rely on social software. Among the tech industries, more than 65 percent already do.

The industries less excited about the social business concept include energy and utilities, manufacturing, and financial services. However, even these industries do not dismiss the concept outright. Almost half the managers in energy and utilities (which are generally conservative and slow to change) say it will be more important in three years.

The downside for all of these businesses is clear enough. Several struggle with defining the terms they apply to their business, developing long-term vision, funding adoption, and prioritization. The overwhelming holdback is fear in various forms, including employee abuse, change, and self-preservation by means of operating in closed silos. Justification of those fears are often verbalized as risk, security, legal liabilities, regulatory concerns, lack of measurable results, and the lack of industry-wide adoption.

There also seems to be an overemphasis on growing revenue (and linking measurements to it) as opposed to pursuits that result in revenue growth, e.g., innovation, cost reduction, and better efficiency. And while social software (including social media) is generally considered the backbone of social business (whether applied internally or externally), the adoption of these tools are largely underfunded.

The study included surveying managers in 115 countries and 24 different industries. The 3,500 respondents represented a cross-section of management roles, ranging from coordinators to those on boards of directors. You can find the report on social business here. It requires the submission of a name and valid email address.
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