Survival of the Social

by External05 Aug 2013

There remains a significant number of Australian companies that are resisting the idea of fully integrating social networking into the corporate environment. Cuneyt Uysal explains why such resistance is futile and how history is on the side of the social innovators.


Throughout history, human networks have had a fundamental impact on the way we work, our business performance and productivity, and even our quality of life. One of the biggest networks in recent history was the “network of hands” that arose in the industrial revolution, when people overcame physical limitations through the use of technology. It was a period that led to wide-ranging productivity and lifestyle improvements; when worker output increased one thousand fold, the population of England grew by a factor of two hundred and income per person rose by a factor of one hundred. At the societal level, child mortality rates declined dramatically. No business could afford to ignore the changes and still compete due to the physical productivity being unleashed by technology.

Next, thanks to the digital revolution, we had the more cerebral “network of minds”. Once again, productivity leaped as businesses embraced new technologies. Across western nations unemployment declined, GDP per capita rose, and the quality of life became even better. It has became unthinkable that any organisation would consider trying to operate without the support of at least some of the innovations of this era – PCs, laptops, email, smartphones and other similar devices. 

Now, we find ourselves in the midst of another fundamental human network-driven change courtesy of the social revolution. We have all but exhausted our ability to achieve physical productivity improvements on a grand scale and we've almost maxed out major productivity gains through digitisation. Instead we are now looking to innovate at the emotional level. And just as in the past, organisations will soon discover the resulting productivity improvements make the old way of doing business unsustainable.

The business value of social

McKinsey Global Institute estimates that by fully implementing social technologies, companies can raise the productivity of high-skill knowledge workers by 20 to 25 per cent. Social technologies can also help companies achieve margin improvements of between 5 and 11 per cent. At a time when businesses are struggling to energise the market, when turnover and margin have been low for at least four years, these are compelling figures.

The major benefits of social in business can be divided into four areas: strategy, innovation, go to market initiatives and operations.

Strategy is the core of social. It could be described as being in the state of mind of social. It is what drives employee engagement in the conversation, aligns social activities with business goals and objectives, and defines technology engagement. When social becomes a normal state of mind for the organisation, people become more open to seeking out and sharing best practices, feedback, comments and support. Crowdsourcing helps to bring new ideas to the fore. As people become more practiced in their social conversations, they get better at sharing. Collaboration and productivity increase.

Social assists innovation by helping to seek out genius ideas that are then turned into workable roadmaps. Social opens up communication within the business, providing a way to tap into expertise and ideas beyond the R&D team, allowing anyone in the organisation to contribute their thoughts for improvement. Imagine if, thanks to social conversations, you found a way to cut your time from design to saleable product by one fifth? Your business would be able to go to market 20 per cent earlier than your competitors.

And when it is time to market your initiatives, social combines with mobile technologies to empower employees in the field, providing them with access to expertise, information and support so they can win more deals and close sales faster. Research suggests by applying social technologies to this part of the business, organisations can achieve value improvements of between 25 and 40 per cent.

Some people fear that the use of social within operational areas of the business will prove to be a distraction. Research suggests otherwise, highlighting benefits ranging from reduced communication costs, improved collaboration leading to increased speed and efficiency, better sharing of information and improved decision making. The trick is to tie social into the existing information infrastructure, making sure all the investments of the past are included so that social conversations occur within your business environment, rather than in a vacuum.

If you don't, somebody else will

According to McKinsey research, the return on social investment varies according to the nature of the industry and the area of business where it is used. For example, manufacturing companies can gain an additional 40 per cent value in their go to market initiatives simply by using social for activities such as demand generation. Consumer goods organisations typically gain between 29 and 46 per cent productivity improvements in operations due to social collaboration.  

Across all industries, a social strategy can result in between 65 and 100 per cent greater profit. With so much additional profit and productivity at stake, it is likely that the real ROI of social is survival. Once again, change has made the old way of doing business unsustainable and organisations will soon find themselves impelled to join the social conversation or be replaced by someone else who does.

About the author

Cuneyt Uysal is Director - Asia Pacific at NewsGator Technologies