Social Business: What Are Companies Really Doing?

Many business leaders believe that social business is important or somewhat important to their business today. Fully 86% of managers believe social business will be important or somewhat important in three years. Social business is viewed most often as a tool for external-facing activities.

We present key findings from Sloan’s 2012 Social Business Global Executive Study and Research Project.

Social Business Matters Today, and Will Matter Even More Tomorrow

A majority of respondents (52%) to our survey believe that social business is important or somewhat important to their business today. Fully 86% of managers believe social business will be important or somewhat important in three years. Social business is viewed most often as a tool for external-facing activities.

• Survey respondents say marketing, sales and customer service are most responsible for driving social software use in their organizations.
• On average, respondents say the most important use of social software is for managing customer relationships.
• The second most important use of social software is to innovate for competitive differentiation.

Key takeaways: Managers surveyed believe that social software will become increasingly important to their organizations during the next few years. Although most managers continue to view social software as an externally facing activity, its relevance to innovation is also being recognized.

Some Leaders Are Enthusiastic, but Lack Metrics to Prove Value

Most respondents to our survey believe that successful social business activities require leadership but acknowledge that their organizations are not measuring social software use.

• In our survey, leadership and a clear vision are cited most frequently as critical to adoption of social software. Lack of management support is cited most frequently as the biggest barrier to adoption.
• At the same time, the most common answer to the question, “How do you measure social software use?” is: Do Not Measure.
• Leaders most responsible for the strategic direction of an organization — CEOs, presidents and managing directors — are almost twice as likely as CIOs and CFOs to say that social business is important to their organization.

Key takeaways: Social business depends on leadership. Metrics may not be critical when companies are experimenting with using social software, but as social software use becomes more important to an organization, having metrics in place can help managers assess, encourage and reward related behaviors. These metrics may be even more important in organizations that need to shift their cultures to be more compatible with social business. In addition, while the survey results indicate that social business depends on leadership, our interviews indicate that leadership can be improved with social business. CEOs may recognize this more than other members of the C-suite.

Size Matters

Respondents from small and large companies say social business is important to their organization at twice the rate of managers from midsize companies.

• To back their social business activities, both small companies (those with fewer than 1,000 employees) and large companies (those with more than 100,000 employees) tend to have stronger management support for social business initiatives than do midsize companies.
• Over time, the gap between small, midsize and large companies may narrow. When managers were asked about the importance of social business to their organization three years from today, there was little difference between how these groups view the future importance of social business.

Key takeaways: With social tools, small companies are demonstrating that they can appear larger than their actual size; large companies can appear less like corporate behemoths. Midsize companies see the advantages of social tools but, in general, do not see themselves exploiting these advantages for another few years.

Media and Tech Are Leading the Way

Based on our findings, social business is thriving in at least two industry sectors: entertainment, media and publishing (Media) and IT and technology (Tech).

• In the Media industries, 74.9% of managers say that social software is important or somewhat important to their companies today.
• In the Tech industries, 65.9% of managers say that social software is important or somewhat important to their companies today.
• Managers who are least likely to say social software is important are from the energy and utilities, manufacturing and financial services industries.
• However, respondents from these industries say that social software will become much more important in three years.
  • Energy and Utilities: 7.1% of respondents in this industry say social software is important today, but 46.8% say social software will be important in three years.
  • Manufacturing: 9% of respondents in this industry say social software is important today, but 50% say social software will be important in three years.
  • Financial Services: 10.4% of respondents in this industry say social software is important today, but 58.4% say social software will be important in three years.

Key takeaways: Some industries are seeing more value from social tools than other industries. But even managers in industries that place a lower value on social business believe social tools will become much more valuable over time. Energy and utilities, manufacturing and the financial services sectors expect that social business will become five to six times more important to their organizations in three years.

By David Kiron, Doug Palmer, Anh Nguyen Phillips and Nina Kruschwitz, from: http://sloanreview.mit.edu/feature/social-business-value-key-findings/?utm_source=WhatCounts+Publicaster+Edition&utm_medium=email&utm_campaign=Social+Report+May+30+2012&utm_content=Learn+more+