Here is What Everyone Else is Doing with Social Media

“Transforming the Business through Social Tools“
Jacques Bughin, Michael Chui, and Martin Harrysson
McKinsey.com
January 2015

The folks at McKinsey have conducted a survey of 1,420 executives worldwide in an effort to understand how social media is transforming business. The results were interesting. While McKinsey clearly expected to find an impact on customer-facing processes, they did not expect that social could benefit other functions. But the data speak very clearly.

Some high points:

• 49% of the responding companies use social for recruiting and hiring
• 35% use social media for new-product development and/or R&D
• 33% use social media for talent management, development, and training
• 33% use social media for strategy development
• 32% use social media for IT management

Some of the areas where social media tools are not being used as readily:

• Order to Cash (10%)
• Risk management (12%)
• Financial planning and analysis (12%)
• Supply Chain Management (14%)
• Procurement (16%)

The one that surprised me was supply chain management. Given the systems being put into place to monitor the progress of an order through the supply chain, social seems a no-brainer way to keep groups in the loop about the progress of critical orders.

The article is a quick read with lots of charts. If for no other reason, the article is worth reading because it forces you to ask “what are we doing with social, and how much more could we do with it?”

Wisdom from Dilbert: Substance Matters

Once again Dilbert serves as an unexpected source of insight for building an effective enterprise social network behind the company firewall.

Dilbert points out the obvious problem with the stalled “Project Unicorn” by telling his boss….

To which his boss replies….

While the executives in Dilbert’s world may think “there’s no time for substance when you’re at the top”, the real world executives we work with everyday know that substance is critically important.

If we are going to create meaningful social business content within our companies social networks, we need to keep three best practices in mind

• 1) Relentlessly Focus on Adding Business Value: Every activity of your company’s social network should be tightly aligned with contributing to increased business value.  Examples may include a dynamic wiki post that serves as a single source of truth for a pipeline of sales deals for a critical product line or a discussion forum that helps employees quickly answer common HR questions.  The key principle is to seek to add content to your enterprise social network that drives either top line or bottom line savings.  If you can’t identify business growth or savings in your content, then it should go the way of “project unicorn” and die.

• 2) Create a Constant Feedback Loop for Users: “But how do I determine if content add business value?”  The answer to this reasonable question is closer than you think – ask the users of your enterprise network and (gasp!) your end customers.  You must reinforce the importance of adding business value by encouraging a healthy degree of criticism from all users and external customers.  Through various channels – on-line and off-line – ask employees and customers to provide constructive criticism of the business value of your social content by asking “How does this content help us either drive sales or save cost?”.  Granted you may not be able to allow your customers to see all of the internal content, but you can still get helpful feedback by describing the content to them and actively seeking to understand what will add value for them.

• 3) Remember Social is One of Many Channels: Keep the value of your social enterprise content in context.  If you encourage creating content that drives business value and reinforce the value of such content through a healthy feedback loop, you will well be on your way to creating business relevant content.  However, never forget that the information captured on your social network constitutes only a fraction of the information pulsing within and into your organization.  The social network should help capture critical business content, but is only one of the channels through which the information is captured.  The network can never replace face to face brainstorming sessions with your team, the creative genius of a subject matter expert or direct customer feedback.

Relevant content is critical to the value of any social network and the social networks behind company firewalls are no exception.  If we keep these three best practices in mind, we will well position our companies for creating content that adds business value.  The sooner we can encourage the creation of such content, the quicker our executives and key stakeholders will see that there is indeed always “time for substance”.

For your further amusement the full cartoon strip is below or you can see it here on the Dilbert site.

 

Social as a Global Tool: Part 3 – WeChat: An Innovation Platform

A critical innovation that has built Tencent up as the world’s fourth largest internet company is its ability to leverage WeChat as an innovation platform.  As my blog co-author, David Wolf, clearly outlined in this April 2014 post innovation platforms are “technologies that serve as foundations that allow others to innovation”.

In China’s competitive social media space, WeChat is just such a innovation platform as it not only offers a first rate messaging features, but more importantly provides easy access to other valuable services.  Five of these innovations are clearly outlined in this February 2014 Tech in Asia piece, but I would highlight two that will become increasingly important:

It’s a Marketing Platform…

Through subscription based accounts users can receive the latest marketing content from brands they follow. The beauty of WeChat is that the platform is not only open to major brands – sample 3M ad below – but also local or regional players – like the Shanghai-based Mexican Grill called Salubre.  Much like Twitter or Facebook in the U.S., WeChat provides both large and small companies a social platform to connect directly with consumers.

No, It’s a Payments Platform…

WeChat also provides convenient access to a variety of financial services. The platform covers a wide variety of services from ordering a taxi (like Uber or Lyft) to learning about group buying discounts (similar to GroupOn).  Such payment services are becoming more popular as indicated by the fact that the WeChat wallet was used over 40 million times during the 2014 Chinese New Year to exchange “lucky money”.  These gifts are traditionally exchange through hand-delivered red envelopes filled with cash over the holiday, but WeChat enabled users to do so virtually.

It is Actually An Innovation Platform!

The reality is that marketing platforms – like Twitter and Facebook – and payment platforms – like Uber or GroupOn – are nothing new.  However, Tencent’s key innovation is their ability to use WeChat as an innovation platform.  Tencent has successfully integrated numerous platforms into a single app so that its 438 million users have an increased number of value added services they can access – without every leaving the app.

So What’s the Big Deal!?

In a future post it would be interesting to compare WeChat’s innovation platform to the portfolio of brands that Facebook has collected – including Instagram and Whatsapp.    However, at the moment let’s just appreciation there is immense business value created by the WeChat innovation platform.  The next post in this series will focus on specific tips for leveraging WeChat’s platform (or any social platform) to connect more deeply with your professional colleagues, especially if they are Chinese.

Social as a Global Tool: Part 2 – An Unexpected Tech Giant, China’s Tencent

Before diving into practical tips on leveraging social media tools to connect with Chinese colleagues, it is important to break the Chinese technology sector into broader segments.  At the same time, if tech savvy investors and managers want to fully understand how to gain full business potential from social media tools, they must have an understanding of the game-changing innovations coming from the poorly understood Chinese social media giant – Tencent.

A Picture of China’s Technology Sector  

Early this year, the Wall Street Journal provided a helpful graphic that broke Chinese internet companies into 5 major categories and provided a graphical scale for their market cap.  It is clear that the three most influential companies are Alibaba, Tencent and Baidu in the e-commerce, social media and search markets respectively.

Tencent: An Innovative Social Business Too Few Understand

Within this web of Chinese tech firms, Tencent sits atop the social media sector.  In fact based market value analysis from Statista, Tencent is the world’s fourth largest internet company – behind only Google, Facebook and Amazon.

What is more, since this graphic was published in May Tencent’s market cap has grown to $160 billion dollars in August 2014.  On-line gaming made up over half of Tencent’s August revenue numbers due to its suite of games that effectively engage players to the point of spending real cash to improve their on-line gaming.  But Tencent’s “swiss army knife” is a social messaging app called WeChat (Wei Xin in Chinese) that acts as platform within which the tools 438 million users can not only spend money on cute stickers to share with their friends, but more importantly access an increasing number of value-added services.

Give WeChat a Test Drive

In the next post we will explore these value-added services in more detail, but for the moment take time to explore the WeChat world by downloading the app here and viewing this 3 minute introduction from the Wall Street Journal.

Social as a Global Tool: Part 1 – The Landscape in China

“When China wakes, she will shake the world”  Napoleon Bonaparte

China’s rise to the world’s second largest economy cannot be ignored in any business circle, including social business.  It is well known that guanxi (personal relationships) are one of the three cultural keys that will enable effective work with Chinese colleagues – more details in this June 2013 post.  But what does this relationship building looking like practically within the context of China’s workplace today?

Inevitably, like most countries across the world today China is increasing influenced by social technology tools. However, like many things about the Chinese market, China’s social technology landscape is unique and largely unknown to those outside China.

Honestly, how many people outside of China have ever heard of any of the popular social technology brands listed in the image below?

Source: Digital Strategy Consulting Post – November 28, 2012

Context: Social Technology in China is Growing and Its Mobile 

First, it is helpful to understand just how impactful social technology is in China today.  According to this post from the CEO of the internet marketing company ByReputation.com there were 597 million active social networking users in China as of July 2013.  What is more, the volume of information these users have created increased by 60% in 2012 alone.  In addition social media usage is more common than in the U.S. as 91% of China’s online population has an account on a social media site compared to only 67% in the U.S.

Second, much of this staggering growth has been fueled by smartphone penetration where where according to this video produced by the PR company GroupM there were over 360 million mobile internet users in 2011.  In addition, this number is expected to overtake PC netizens by 2015.  What is more, the same report indicates that smartphone users typically check their phones every 6 minutes and 38% of smartphone users spend more than 5 hours a day on their phones.

Clearly, if you are going to connect with Chinese colleagues today, you need to actively jump into mobile social technology.

Up Next: Practical Tips

The next post will focus on practical tips for harnessing the value of mobile social tools to drive deeper connections and more effective interactions with your Chinese colleagues.  In the meantime, take a few minutes to familiarize your self with several of the major social media platforms in China by checking out Sina’s Weibo or WeChat from Tencent. If you want even more info check out this great list from the ByReputation.com CEO in this infograph.

 

$600 Billion in Bite Sized Chunks

$600B is enormous – roughly the size of the Belgium GDP in 2013.  Fortunately, McKinsey’s report on The Social Economy  clearly articulates bite sized chunks of the $600B in estimated business value from social technologies.  The report lists 10 specific ways social tools add value – both within and across companies.

One critical ways social tools add value internally is #3 – Distributing Business Processes

Keeping the Global Team on the Same Page

Business process are the cogs that run the engine of global companies.  They include a wide variety of activities – from estimating the component supply necessary to meet customer demand to setting up a new vendor in the ERP system. However, when companies have a global workforce, these processes may not be carried out uniformly in all locations.

Social tools provide an easy way for employees across the company to access the same information and keep business processes aligned.  For example, rather than counting on a business manager to send an email out with all of the forms needed to set up a new vendor, a central portal can be created where everyone can download the same files.  In addition, the portal can “go social” when the owner of the business process provides their contact information within the portal.  This same owner can create a section in the portal where they not only maintain a dynamic list of FAQs, but also manage a on-going discussion forum about new questions that arise.  Of course, colleagues who have questions about the specific business process can always pick up the phone to ask a details about setting up a new vendor.  However, the social tools can provide a significant amount of context that makes the phone conversation more efficient.

Practical Ways to Capture Business Value

In the end, social tools – like the portal for approving new vendors – addressed at least two pressing operational issues that provide measurable business benefits:

1. Ensure Consistency: Keeping the relevant files in a central portal ensures that everyone is accessing the latest version.  The net result is a reduction in the cycle time needed to carry out fundamental business process and an increase in the company’s easy of doing business.
2. Reduce Noise, Increased Productivity:  The employee responsible for managing the vendors in our example will improve their productivity as they spend more time focused on getting vendors set up.  It also reduce the “background noise” work of answering the same basic set up questions time and again.

In the future, I plan to provide more examples of the other 10 ways highlighted by the McKinsey report.

 

The Business Value of Social Differs by Industry

We must get sector specific when seeking to “double click” on the potential value of social technology tools to a given company or organization.  As this helpful graphic from McKinsey’s report on The Social Economy shows the value and ease of capturing this value varies greatly by sector or industry.

Interesting Examples: It is especially interesting to note cases where the size of GDP contribution is similar, but the ease of capturing this value differs.  For example, national government and banking have similar sized opportunities.  However, it is easier to capture this value in banking, a largely privatized industry, than in national government institutions.

So What: When looking to leverage social tools to drive business value, not all opportunities are created equally.  Clearly the opportunities and the challenges in banking and national government differ.  We must stop thinking only in terms of the size of business value found in leveraging social tools, but also the industry specific factors that impact the ease of actually using these tools to drive this value.

What We’re Reading: The Social Employee

On our respective night-stands this week is Cheryl and Mark Burgess’ The Social Employee: How Great Companies Make Social Media Work: Success Lessons from IBM, AT&T, Dell, and Cisco on Building a Social Culture. I’m looking forward to understanding the thinking and the methodology the Burgesses use: I remain incredibly skeptical about social media experts who lack experience dealing with wider enterprise issues. Joab, a Cisco employee, is going to do a reality check on the Burgesses’ assessment of Cisco’s success with social media. His experiences at work are what inspired him to begin delving into the subject of social companies. Needless to say, he’s a bit skeptical himself.

Either way, it should be interesting. We’ll let you know what we think.