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The Social Enterprise

Published: 01/05/2015 - Filed under: Home » Archive » 2015 » May 2015 » Special Reports » Home » Features »

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In the digital age, businesses for whom the lingua franca is knowledge have a problem: Too much information spread out among too many sources, and no good way to connect the right knowledge holders together to create real wisdom. The result is that digital knowledge does not get passed between people effectively, and businesses lose out. 

Of course the problem isn’t really new; communication gaps

have been the bane of doing business since the first misdirected

memo (probably dating back to ancient Egypt). More recently, technology platforms such as Intranets have been employed to provide corporate-wide solutions. 

But these days, the exponential growth of digital information is simply overwhelming legacy collaboration tools and widening the gap between who knows what and how best to use that abundance of valuable information.  

Enter the Enterprise Social Network. In much the same way as consumer-facing platforms such as Facebook and LinkedIn create millions of user-defined social groups, enterprise social networks allow employees in companies to organize themselves and communicate in a less formal, more flexible environment. 

Rather than establishing rigid, top-down, often heavily siloed org chart art of who owns what information, ESN tools let employees create profiles and list details about themselves. In turn, this makes it easier for other employees or working groups to find them by skill or responsibility, or by business unit.

The technology lets employees make their own connections and collaborate in ways that best suits their work style and fits in better with how today’s digital employees relate to one another. Connections are made between people who start groups around areas of expertise, projects or special interests. 

According to research by McKinsey and Company, more than half of all such knowledge firms use some form of social media to enable employees to collaborate and exchange information. And the trend is likely to continue to grow; a new study from Frost & Sullivan finds the total number of full-suite enterprise social platform subscribers is expected to go up from 208 million in 2013 to 535 million in 2018.

“Enterprise social networking continues to have mass appeal as it combines the user-friendliness and relationship-oriented nature of consumer social media with more powerful features and enterprise-grade control,” says Robert Arnold, Frost & Sullivan’s information and communication technologies program manager and industry principal. “Moreover, its ability to significantly improve business agility, responsiveness, innovation and customer service owing to increased employee access to information and expertise bolsters the market.”

The Virtual Water Cooler

Of course, enterprises are adapting social networking norms primarily to enhance communication and collaboration in the workplace. The goal, presumably, is to increase employee involvement, speed up decision-making, and boost overall efficiency with the end game of streamlining innovation, leading to greater profitability.

However, research suggests that there may be an untended – and not unwelcome – consequence for the employee who actively engages in the social enterprise. According to Wharton operations and information management professor Lynn Wu, while adopting the enterprise social media can boost a firm’s bottom line, individuals may also get a professional boost: The more these employees use “social” terms while engaging with colleagues on social networks, she says, the less likely they are to be laid off. 

While consumer social media, such as Twitter and Facebook, are the subject of plenty of research, the question of how enterprise social media affects performance, employee effectiveness and collaboration has been largely left unexamined, Wu says. Her research endeavors to understand how enterprises use social media to foster network formation and information acquisition, and how these ultimately impact individual employees and the company’s bottom line.

“I study how enterprise social media affects various types of work outcomes,” Wu says. ”What is unique about this research is that I have [studied] a real social network of employees.”

Her paper, entitled, Social Network Effects on Productivity and Job Security: Evidence from the Adoption of a Social Networking Tool, looks at two factors, information diversity and social communication. Both of these have an impact on work outcomes, but each manifests itself very differently. Information diversity is a measure of how much information you have, or how diverse your information is. The second component, social communication, just as the name implies, is a measure of just how social your communication is. The more social words you include in your communication — such as “coffee,” “lunch,” “dinner,” “football” and “baseball” — the more you are likely to be viewed as one of the team. 

Unsurprisingly, an employee’s information diversity has a strong correlation with billable revenue. “It makes sense,” Wu asserts. “The more information you have, the better a worker you are and the better able you are to solve your client’s problem.” And the more you’ll be able to bill.

On the other hand, Wu’s research found that social communication all by itself doesn’t have a direct impact on billable revenue. But, she says, social communication plays a bigger role than objective measures of performance in predicting whether individuals were laid off during the 2009 recession. “In fact,” Wu says, “that’s the most significant predictor, above and beyond objective performance measures, in predicting whether you’re laid off.”

Effectively, it’s the social networking equivalent of the old water cooler relationships. And in an increasingly virtual environment, an employee’s social role inside the company is determined by how well that individual connects in the virtual realm.

“Perhaps there’s a value that social communication can provide that we don’t see,” Wu notes. “Perhaps this person is a really good team player, and people really enjoy working with this person. Maybe he did not bill directly, but he enabled his co-workers or his colleagues to do a better job.”

Or, she says, you can think of the old boys’ club where people who tend to schmooze a lot get ahead.

Risks & Rewards

Companies that have implemented enterprise social networking cite such primary benefits as improved knowledge transfer between geographically disparate employees, and increased knowledge transfer within the organization. A recent survey by BrightStarr, a provider of digital workplace solutions, found that what companies are looking for from these enterprise social technologies is two-fold; to empower employees to find one another and work smarter together, and to see themselves as part of one larger organization, rather than just a smaller business unit within it. Both ‘Helping find people by skillset and name’ and ‘Breaking down barriers between organizational units’ were drivers for over 60 percent of the IT professionals in the BrightStarr survey. 

Given the evident benefits of enterprise social networking, one might expect to see companies lining up with plans to implement ESN technology. However, despite the dramatic growth in consumer-facing social platforms, Frost & Sullivan estimates that there are still about 2 billion workers worldwide who could benefit from ESN across a number of different industries, organizations, locations and job roles. 

“Organizations of all sizes across different industries could benefit from enterprise social networking solutions,” says Arnold of Frost & Sullivan. “It will be important, however, for end users globally to determine the best deployment model, features and use what will deliver the most value for them.”

The objections to implementing the technology tend to fall into the categories of governance, risk, compliance, and security concerns – particularly in regulated industries and lines of business – and cost. 

“Privacy and governance issues with open, user-empowering technologies like enterprise social are a concern for management,” says Will Saville, CEO of BrightStarr. “But in reality they can be easily overcome with putting sensible precautions and a solid governance plan in place. We find that news stories about public social media misuse can unfairly bias thinking about enterprise social media. Once our consultants have explained appropriate governance the objections disappear.” 

Social Matters

“In America, we think of meritocracy,” says Wu. “We think that meritocracy is ultimately what gets us promoted. We are rewarded for doing our job well. But the fact is that the research has shown that social communication matters.”

For both businesses and workers, the ultimate goal is to do a good job and get recognized for what you know and what you can contribute. Thus acquiring, owning and effectively sharing a great deal of fresh, actionable information enhances your value in that equation. Your social network really plays a key role in helping you accomplish that. 

But at the same time, social networks also help you develop the relationships around you. “It actually pays to get to know your co-workers, to understand what’s going on at a work force,” Wu maintains. “Those kinds of intangible benefits through social communication can be very valuable to workers.”

Wu says she views social communication as a social lubricant, but it can have its downside risks as well. “If it makes team collaboration better,” she says. “Then you should foster that. But if social communication really is about political back-stabbing or an old boys’ club, maybe you should try to prevent that.”

Social media is so much a part of everyday life that adapting this technology into workplace collaboration is already well underway. It can generally be applicable to all kinds of information workers, including lawyers, scientists and educators — any kind of information related worker will find ESN valuable. 

Beyond that, the ‘soft’ benefits of collaboration in a social network cannot be underestimated – both to individuals and to the companies they work for.

“That’s an interesting takeaway in the sense that not only should you do your job well, but you also should worry about intangible communication or other things you have to do at work to make it more likely that you’ll be keeping your job or may be promoted or improve your career outcome,” Wu says. 

However, Wu continues, we are sailing in uncharted social waters here; while this type of networking relies on the unique intermediation of technology, there are challenges and social norms that are as old as the old office water cooler crowd. 

“If you think about it, in order to make a connection, you need to find the person you want to connect with, but you also need to persuade that person to become connected to you. If you had social capital before, you are even better off because you have the power to make that person connect to you. If you don’t have that power, even if you have found a person, they may not choose to connect with you, and then you’re actually worse off.” 

The professor cautions these are just a few among many “unexpected consequences that firms should try to understand before they adopt these types of technologies.”  

By Dan Booth


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