Companies embracing social networks both internally and externally appear to be achieving bottom-line benefits, but this requires more than technology. It also means empowering employees at every level to make decisions and provide them with more flexibility in how to solve problems.
According to recent findings by McKinsey & Company, a new class of company is emerging that uses collaborative Web 2.0 technologies (wikis, blogs, social networks, mash-ups, etc.) intensively to connect the internal efforts of employees and extend an organization’s reach to customers, partners and suppliers.
The McKinsey worldwide survey of 3,249 executives across a range of regions, industries and functional areas found that two-thirds of respondents use Web 2.0 technologies in their organizations and the results are paying off. The survey asked respondents about their patterns of Web 2.0 use, the measurable business benefits they derived from it and the organizational impact of Web technologies.
More than two-thirds (69%) reported that their companies have gained measurable business benefits, including more innovative products and services, more effective marketing, better access to knowledge, lower cost of doing business, and higher revenues.
This is great news for businesses and their shareholders as well as the economy as a whole. The widespread use of Twitter and Facebook is beginning to look like more than a passing fad, but as a valid way to leverage business opportunities. Blogging can now be used to reach customers more directly and establish stronger relationships.
This is also good for a company’s ability to increase productivity, innovate more and increase employee engagement. According to the survey, the internal organizational impact included increased information sharing, less hierarchical information flows and collaboration across organizational silos.
Those businesses who embrace Web 2.0 technologies both internally and externally deploy talent more flexibly to deal with problems and allow employees lower in the corporate hierarchy to make decisions.
Implementing any new technology in an organization requires employee training to use it, but in the case of Web 2.0, there is also a need to alter corporate culture behaviorally. Just because there is a wiki, doesn’t mean people will contribute to it. Blogging without guidelines, support and incentives won’t necessarily lead to greater usage.
Social networking requires truly embracing the social to be successful and this may very well change the way employees interact inside the organization. Information won’t flow more freely because of technology alone. It also requires a cultural shift in the way employees interact with each other that is based upon mutual respect and trust.
Perhaps this is what separates the 3% of companies included in the McKinsey survey who are considered fully networked—those that have embraced Web 2.0 technologies both internally and externally. They are realizing the most benefits because they have focused their efforts on the cultural aspects as well as the technology.
To realize the bottom-line benefits of Web 2.0, organizations need to focus on the behavior accompanying it. This means empowering employees and giving them greater flexibility to do their jobs.
How is Web 2.0 technology being adopted in your company? Is it just the latest business strategy or is it fully embraced and supported with a focus on shifting the corporate culture so that it can be successful?