Social Business: Full Speed Ahead or Proceed with Caution?

CASE STUDY

Many of today's employees are already well versed in

the basics of public social networking using tools such

as Facebook, Twitter, and Instagram. Larry Ellison,

head of the giant software firm Oracle, even went so

far as to declare that social networking should be the

backbone of business applications and that Facebook

is a good model for how business users should interact with software.

According to Gartner, Inc., 50 percent of large organizations will soon have internal Facebook-like social

networks, and 30 percent of these will be considered as essential as e-mail and telephones are today.

Enterprise social networks will become the primary

communications channels for noticing, deciding on,

or acting on information relevant to carrying out

work. However, Gartner also notes that through 2015,

80 percent of social business efforts will not achieve

the intended benefits due to inadequate leadership

and an overemphasis on technology.

Social initiatives in a business are different

from other technology deployments. For example,

implementations of enterprise resource planning

or customer relationship management systems are

top-down: Workers are trained in the application and

expected to use it. In contrast, social business tools

require more of a "pull" approach, one that engagesworkers and offers them a significantly better way

to work. In most cases, they can't be forced to use

social apps.

When firms introduce new social media technology (as well as other technologies), employees often

resist the new tools, clinging to old ways of working, such as e-mail, because they are more familiar and comfortable. There are companies where

employees have duplicated communication on both

social media and e-mail, increasing the time and

cost of performing their jobs. BASF, the world's largest chemical producer with subsidiaries and joint

ventures in more than 80 countries, prohibited

some project teams from using e-mail to encourage

employees to use new social media tools.

Social business requires a change in thinking,

including the ability to view the organization in a

flatter and more horizontal way. A social business is

much more open to everyone's ideas. A secretary,

assembly line worker, or sales clerk might be the

source of the next big idea.

Social media's key capabilities for managing social

networks and sharing digital content can help or

hurt an organization. Social networks can provide

rich and diverse sources of information that enhance

organizational productivity, efficiency, and innovation, or they can be used to support preexisting

groups of like-minded people which are reluctant to

communicate and exchange knowledge with outsiders. Productivity and morale will fall if employees

use internal social networks to criticize others or pursue personal agendas.

Social business applications modeled on

consumer-facing platforms such as Facebook and

Twitter will not necessarily work well in an organization that has different objectives. Will the firm use

social business for operations, human resources, or

innovation? The social media platform that will work

best depends on its specific business purpose.

This means that instead of focusing on the technology, businesses should first identify how social

initiatives will actually improve work practices for

employees and managers. They need a detailed

understanding of social networks: how people are

currently working, with whom they are working,

what their needs are, and measures for overcoming

employee biases and resistance.

A successful social business strategy requires

leadership and behavioral changes. Just sponsoring a social project is not enoughmanagers need

to demonstrate their commitment to a more open,

transparent work style. Employees who are used to

collaborating and doing business in more traditional

ways need an incentive to use social software.

Changing an organization to work in a different way

requires enlisting those most engaged and interested

in helping and designing and building the right workplace environment for using social technologies.

Management needs to ensure that the internal and

external social networking efforts of the company

are providing genuine value to the business. Content

on the networks needs to be relevant, up-to-date,

and easy to access; users need to be able to connect

to people who have the information they need and

who would otherwise be out of reach or difficult to

reach. Social business tools should be appropriate for

the tasks at hand and the organization's business processes, and users need to understand how and why

to use them. For example, in 2012 NASA's Goddard

Space Flight Center had to abandon a custom-built

enterprise social network called Spacebook because

no one knew how its social tools would help people

do their jobs. Spacebook was designed to help small

teams collaborate without e-mailing larger groups,

but very few users adopted it.

Despite the challenges associated with launching an internal social network, there are companies

using these networks successfully. For example,

Bayer Material Sciences, the $11.8 billion material

sciences division of Bayer, made social collaboration a success by making the tools more accessible,

demonstrating the value of these tools in pilot projects, employing a reverse mentoring program for

senior executives, and training employee experts

to spread know-how of the new social tools and

approaches within the company and demonstrate

their usefulness.

Bayer Material Sciences chose IBM Connections

for its social business toolset. IBM Connections is a

social platform for collaboration, cooperation, and

consolidation typically used in a centralized enterprise social network. Featured are tools for employee

profiles; communities of people with common interests and expertise; blogs; wikis; viewing, organizing,

and managing tasks; forums for exchanging ideas

with others; and polls and surveys of customers and

fellow employees along with a home page for each

user to see what is happening across that person's

social network and access important social data.

A year after the new collaboration tools were

introduced, adoption had plateaued. Working with

company information technology and business

leaders, management established an ambitious

set of goals for growing social business along with

seven key performance indicators (KPIs) to measure collaboration, creating stronger networks across

regions and departments, creating a less hierarchical culture of sharing, and reducing the confusion of

which tools are intended for which job.

These efforts are now paying off: 50 percent of

employees are now routinely active in the company's enterprise social network. Although ROI on

social business initiatives has been difficult to measure, Bayer Material Sciences has benefited from

faster knowledge flows, increased efficiency, and

lower operating costs.

Another company that has made social business

work is Carlo's Bake Shop, an old family-owned business that is the star of the Cake Boss reality television

series on the cable television network TL C. The company has 10 locations in New Jersey, New York, and

Las Vegas, and people can order custom cakes from

its website. Thanks to the popularity of Cake Boss ,

which created a huge upsurge in demand for Carlo's

products, the firm is looking to create national

presence over the next few years.

However, store operations were holding the company back. Carlo's was heavily paper-based, and the

mountain of paperwork wasted employee time and

led to errors, which sometimes resulted in a need to

fix or remake cakes or offer partial or total refunds to

customers. Custom orders were on paper and carbon

paper, order forms were misplaced or lost, and people

couldn't read the handwriting from the order taker.

In the latter half of 2012, Carlo's implemented

Salesforce CRM with the Salesforce social networking

tool Chatter as a solution. Some employees and members of Carlo's management team initially resisted the

new system. They believed that because they already

used e-mail, Facebook, and Twitter, they didn't need

another social tool. The company was able to demonstrate the benefits of social business, and bakers and

Chatter changed the way they worked.

Carlo's produces a very large volume of custom

cakes from a 75,000-square-foot commissary in Jersey City operating around the clock. Chatter is now

the de facto standard for internal communication

from order to delivery. If a key cake decorator is

away, that person is still included in the communication and discussion process. Upon returning, the

decorator can view any changes in color, shape, or

design.

Because Carlo's employees now work more

socially, errors are down by more than 30 percent,

and crews are able to produce cakes and other custom products more rapidly and efficiently. Managers

have access to a data and analytics dashboard that

allows them to instantly view store performance

and which products are hot and which are not. They

can see sales and transaction patterns in depth. As

Carlo's expands nationally and perhaps globally, the

ability to connect people and view order streams

is critical. Social business tools have transformed

an organization that was gradually sinking under

the weight of paper into a highly efficient digital

business.

CASE STUDY QUESTIONS

2- 13 Identify the management, organization, and

technology factors responsible for impeding

adoption of internal corporate social networks.

2- 14 Compare the experiences implementing

internal social networks of the two organizations described in this case. Why were they

successful? What role did management play in

this process?

2- 15 Should all companies implement internal

enterprise social networks? Why or why not?