Part 2: Corporate Strategy and Social Networking
In Part 1 we defined social networks as the actual communities that emerge from the introduction of enterprise social media solutions. In this article we will look at the role of social networking in typical strategic project areas.
There is increasing evidence that social media can be used all along the value chain, from internal strategic applications and human resources, both described in this article, to external communications, from marketing and brand building to sales and customer service. For more examples on the creation of value from social networking, check out Mattern and others at McKinsey & Company who surveyed 200 German companies.
So you might ask, can social networks play a role in supporting strategic projects?
Multi-national companies usually have a range of strategic activities to support their corporate aspirations.
For the purpose of this article, consider three internally focused areas that routinely appear in the top strategic ambitions of multi-national companies and are typically addressed through transformational change management initiatives:
- increasing organisation agility: company acquisition integration and operational efficiency
- improving staff engagement, and
- increasing product innovation
The pace of change in modern international business means ongoing challenges to ensure relevance and competitiveness in each market. From time to time the company will need to refocus its human resources and assets around its declared goals. This commonly translates into internal transformational change projects such as acquisition integration and operational efficiency.
As an illustration of acquisition integration and operational efficiency challenges, consider these two examples:
- a collective of poorly engaged employees somewhere in their organisation, perhaps the result of a company merger, restructure, geographic expansion or shift in core activities, and
- operational efficiency issues, impeded by the barriers between people in different business units, business functions or geographies, or other organisational ‘silos’.
Today we typically change existing organisational structures as part of refocusing human resources and assets to help achieve company goals. In reality, organisational restructuring is often difficult, disruptive, and there is a danger that it becomes an end in itself. In these circumstances it becomes difficult to achieve the required objectives, and this is commonly referred to as a lack of organisation agility.
Can social networking increase organisational agility?
Traditionally, the internal value of organisational structures is that they have defined the way people work together and they encourage both formal channels of communication and local geography or business-unit tribe behaviour. People know where they stand, what their role is, and who they report to. The disadvantage of organisational structures is that people become too comfortable in a company structure and develop a resistance to change. Aguirre, von Post and Alpern examined the role of company culture in enabling organizational change in their research and concluded that without the right attention to cultural issues in change programmes, employees may engage in a manner that creates uncertainty, deep down in an organisation, and this can keep a change initiative from gaining momentum.
There is potentially high value in social networking to assist companies address organisational cultural change issues such as increasing employee engagement, improving how staff work together, and breaking down organisational barriers. Where there is a reduced dependency on organisational structures to define the way people work, it follows that restructuring may be more easily implemented, more sustainable. In short, there will be an increase in organisational agility. The seven areas of hidden value identified in Part 1, illustrate practical areas of improvement that reduce structural dependencies created in the absence of good communication and collaboration. To increase agility consider:
- capturing local practices to ensure there is reduced knowledge gap and dependencies on single individuals
- standardising local procedures by documenting and improve potential for further improvement projects
- uncovering hidden resources by engaging employees and enlisting their support to identify hidden or poorly utilised resources
- redeploying local expertise in terms of best practice to similar areas of the business
- revealing hidden assets through audits and ongoing asset management improvements
- reducing duplication in projects or processes by increasing organisational visibility
- revealing hidden products and services that should be revitalised or shut down
Improving Staff Engagement
The issue of low levels of staff engagement is an ongoing issue for many companies, whether due to organisational change as described above, information overload (see Deloitte) and too many or conflicting change objectives (see Aguirre, von Post and Alpern) or a combination of these reasons. In their global 2013 survey Hays reported the magnitude of the issue noting that 43 percent of employees do not feel motivated by their organisations. They went on to say that 38 percent of employees have concerns that working conditions are preventing them to be as productive as they could be. Please refer to their article for their recommendations.
As an illustration of employee engagement, Josh Bernoff and Charlene Li reported that Best Buy Co. Inc., the huge USA electronics retailer, built a social network online, Blue Shirt Nation, that in 3 months had grown to 14,000 members, mostly blue-shirt staffers, representing 10% of all full-time Best Buy employees. The authors noted that Blue Shirt Nation evolved in directions beyond its original intent into a support forum that improves the operational efficiency of the company. Employees use the forum to help each other rather than go up and down through traditional management ladder.
Blue Shirt Nation demonstrates a common feature of social networks; that is they evolve to address adjacent needs of their community, changing the way people work in the process.
If you are interested in recent studies of how corporate social networks have improved employee engagement see the article and references cited by Shel Holz. Shel has also emphasised the power of combining social networks with leadership.
Innovation is defined, for present purposes, as a step improvement in business performance, cost or development outcome of a product or service, or a process improvement that delivers an external outcome such as increased speed to market. To examine the natural linkage of innovation with social networks, it is useful to consider the innovation value chain.
In describing innovation as a value chain, Hansen and Birkinshaw recommend viewing innovation as comprising three phases: idea generation, conversion, and diffusion. Six linking tasks are performed across those phases: internal, external, and cross-unit collaboration; idea selection, idea development; and spread of developed ideas as illustrated below.
The potential value of social networking is intuitively clear; the opportunity to work collaboratively, select and develop ideas then spread the development of ideas is consistent with the new ways of working that social networking presents.
As innovation takes many forms within the definitions above, the following examples serve to demonstrate the application of social networking:
- to substantially reduce costs, pharmaceutical companies are collaborating using private social networks, early in the drug development cycle (example)
- to reduce product development cycles and increase speed to market, problem solving is being accelerated through crowdsourcing and distributed special interest groups which are both forms of social networks often spanning multiple companies and into the public domain
- Salesforce.com improved their feedback and product development process by engaging customers, capturing their 10,000 feature requests and enabling customers to vote on them, helping Salesforce.com developers keep in touch with what the market truly wants (Josh Bernoff and Charlene Li).
Summary of Part 2
Social networking can assist in addressing many company challenges, and is already being applied widely across company value chains today as demonstrated in this article.
There appears to be huge potential for companies to embrace social networking for internal strategic activities such as; increasing organisation agility, improving staff engagement, and increasing product innovation.
Of course the individual application of social media and value derived from the development of social networking will be different for each company. In the Part 3 of this article we will examine how employees adopt social networking and the types of forums that companies may wish to implement.