Social Technologies in the Enterprise – Rising to the Challenge

By Evgeny Kaganer, Sandra Sieber and Neil Hair

“What we are looking at is how to build a collaborative platform hooked into business automation software. We need to develop a cohesive approach to support business processes with social networking because the real value comes from bringing the two together.”

These were the words of a senior IT Executive with a large global manufacturing conglomerate headquartered the US. The company, founded more than a hundred years ago, was actively exploring how social media and collaboration technologies (a.k.a., social technologies) could enhance its business both internally – with the employees, and externally – with customers, suppliers, and business partners.

Blogs, social networks, micro-blogging, wikis, and other online social technologies have long become a mainstay of our personal online experience. They are now spilling into the enterprise.

In this article, based on research interviews with more than a hundred senior and middle managers spearheading social technology initiatives in their organizations, we highlight the expanding nature of “social” in the enterprise and argue for a comprehensive governance framework that will enable organizations to make the most out of this transition.

 

The Rise of “Social” and the Need for Better Governance

The point of entry of social technologies in most companies had been the customer interface. As consumers started to spend significant time in social networks and online communities, sharing information and entering into conversations, corporate marketing departments seized the opportunity to reach out and engage these audiences. Overtime, as the scope and sophistication of the marketing outreach initiatives grew, other customer-facing functions – such as customer service and new produce development – joined suit.

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Today, social technology extends well beyond the customer interface. Internal communities of practice, employee-driven wikis, corporate micro-blogging, social learning platforms etc. are sprouting in all key areas of the enterprise value chain. And even though many of these initiatives remain in the early maturity stages, organizations are convinced they hold tremendous potential to drive business value.

Along with the new opportunities, however, this shift presents companies with a set of new (and not so new) challenges and risks. Dealing with these will require organizations to move away from managing social technology initiatives on an ad-hoc basis, a practice prevalent today, and to establishing a comprehensive enterprise-wide governance framework.

The specifics of such a governance framework may vary from industry to industry and from company to company. But the four main areas the framework will need to address will likely be common to all (see Figure 1). These areas constantly reemerged in interviews, conversations and workshops we have held with people in charge of corporate social technology initiatives. Below, we share some of the key insights for each of the four areas.

 

 

Strategy – How to Decide What Initiatives to Launch?

It is common for companies to embark on social technology initiatives without a clear strategic vision for why such a step should be pursued. The media hype surrounding the likes of Facebook and Twitter surely contributes to this trend, as companies jump on the bandwagon. But more importantly, it has to do with how enterprise social technology initiatives are being launched at most organizations today.

Usually, the process follows a bottom-up approach. Spearheaded by an employee or a group of employees with an idea for improving a particular process or function with “social”, it gradually percolates up the organizational hierarchy. The final “go” or “no-go” decision is normally made at the C-suite level, but the person making the decision and the criteria on which it is based varies widely from one project to another.

As a manager with a large UK manufacturing firm put it “…governance is something that the business doesn’t quite have a handle on. Is it traditional IT? Probably not… Is it with the business communications folks? They’ve shied away because it feels a little too techie. There needs to be a part of the organization where it is covered, but it is not quite there yet…”

Most companies currently do not have a single point of ownership for launching social technology initiatives. As a result, the decisions are often made on an ad-hoc basis. In worst-case scenario, this leaves firms with fragmented initiative and tool portfolios that are not aligned with the overall business strategy.

What can be done to improve the situation? Fundamentally, this challenge is no different than coordinating decisions concerning any projects, technologies, or processes that span multiple business functions. Think, for example, large IT implementation projects or legal compliance initiatives. What is proven to work best in this scenario is governing by committee. A steering committee on social technology initiatives will ensure that interests of all stakeholders are taken into account and the idea is given a well-rounded assessment both in terms of its risks and strategic fit. The challenge, of course, is to make sure that such a centralized approach empowers rather than stifles local initiative.

Another important aspect for launching social technology initiatives concerns establishing clear and consistent decision-making criteria. Such criteria are usually based on some flavor of cost-benefit analysis. But while calculating the costs rarely poses a problem, quantifying business benefits of social technology has remained elusive.

This should come as no surprise, however, considering the main objective of social media and collaboration tools. These are not technologies aimed at automating business processes, where improvements in efficiency and cost savings can be readily captured. Social technologies streamline the flow of information and ramp up knowledge production and sharing inside and outside the organization. Their impact is contingent on how they are being applied by the users and often can only be seen as an improvement in a particular capability, such as the speed of best practice adoption across organization, improvements in team effectiveness etc. Identifying the salient capabilities and establishing metrics should be a part of the early planning process, before the initiative has been launched.

 

How to Deal with the Loss of Control?

There is a significant unease among business executives over the loss of control over what users, both employees and customers, can do when provided with social media and collaboration tools. Social technologies are designed to “democratize” content creation and sharing. This makes them difficult to control in a traditional way and raises the risks of security, confidentiality, disclosure of information, and legal compliance for organizations.

To address these risks, companies establish employee policies on the use of social technology. We estimate that currently 50-60% of organizations in North America and Europe have such policies in place. Designed to provide the basic “rules of the game”, these documents may vary in scope and content. Most policies cover a core set of issues including what tools and platforms are available for employees, what content can be shared, how the employees’ identity and corporate affiliation are to be handled, what constitutes appropriate behaviour in the online social environment etc. All too often, however, the policies read overly generic and lack specifics to make them valuable for the users.

This stems from the fact that many companies create social media policies by simply extending their existing corporate communications policies into the social technology space. Little if any adjustments are made to account for the unique characteristics of the online social environment, such as its real-time conversational nature, viral spread, and persistence of content.

To make things worse, the policies often have a strong emphasis on mitigating risks for the company at the expense of providing guidance for the users. In our recent analysis of corporate social media policies, for instance, we found that companies are much more likely to stipulate what kind of content cannot be shared by employees on social technology platforms rather than offer recommendations as to what content the employees may consider sharing. Similarly, in an attempt to account for all known and unknown risks of social technologies, many policies tend to provide long lists of what cannot be done, rounded up with the all-encompassing statement “if unsure, ask your manager”.

Clearly, this approach does little to make the policies a useful reference source for the users. Its value as a risk mitigation tool, therefore, is also questionable. For example, most cases of disclosure of
information via social media we are familiar with happened due to the lack of awareness on the part of the employee, rather than malicious intent. In this sense, user education seems to provide a more effective means to avoid disaster than the rigid policy-based approach.

Traditional policies also fall short of helping organizations generate value through the use of social technologies. Your company can do a lot better by toning down the language of “cannots” and focusing on helping users better understand how to make their experience with social technologies more meaningful and productive. Savvy companies, for example, include in their policies guidelines on how to best engage in a conversation with customers and encourage their participation.

 

Implementation – How to Ensure End-User Participation?

Despite the seemingly endless enthusiasm surrounding consumer social networks, enterprise social initiatives are often plagued by a lack of user adoption. Stories of empty corporate knowledge wikis, unpopulated social directory pages, and lifeless customer communities are abundant among organizations.

There are several reasons why users shy away from social technology implementations. For one, as with any IT-enabled change initiative, employees need to climb up the learning curve, adjust their work routines, and often start doing things that weren’t required before. To justify this extra effort, the new system must be seen as providing valuable benefits. In case of social technologies, however, these benefits are often subject to the “chicken and egg” problem. That is, for the system to start generating tangible benefits for the users, it must first reach a certain threshold in terms of the number of active users. Consider, for example, a corporate knowledge wiki, until it becomes populated with relevant content and updated on a regular basis, most people will feel reluctant to join in. But the creation of content is contingent on the sufficient number of users coming on board, creating the “chicken and egg” vicious cycle.

Another reason is that unlike traditional software that comes with a clear definition of its ends (i.e., what to use it for) and means (i.e., how to use it for that purpose), social technologies merely provide a flexible free-flow collaboration space. This space can be used to facilitate a wide range of tasks and enable a variety of work processes and modes of user interaction. A popular consumer micro-blogging platform Twitter, for example, was originally devised to help members of a software start-up coordinate their work and stay on the same page. Yet, today millions of people use Twitter in million different ways ranging from staying in touch with friends to news discovery to event coordination to customer service.

What this means is that the use cases for social technology (i.e., specific ways to apply the technology for a particular purpose) are not prescribed but emergent. Users discover them as they experiment with the technology across a variety of contexts. But when faced with such an open-ended environment many users become lost and frustrated. They don’t know what exactly to use the tool for and, therefore, decide not to use it at all.

A number of things can be done to help organizations overcome the lack of user adoption. To address the “chicken-and-egg” problem companies should properly stage their deployment projects. The organization-wide rollout of social technologies should always be preceded by the cultivation or seeding stage. During this stage, the social technology pioneers – employees who feel enthusiastic about the project and have the required subject matter expertise – will populate the new platform with content, form communities, start first conversations etc. The goal is to create the sense of a vibrant community – a community that, once introduced to the rest of the organization, will be seen as worth joining and contributing to.

Besides staging, organizations need to devote significant time and effort to educating end-users. Because social technology does not come with prescribed use cases, these need to be developed and clearly communicated to the users by the project team. The cultivation stage offers a good opportunity to devise and document the initial set of use cases. Further, as more users across the organization join the initiative and discover new ways to apply the technology, these applications again need to be documented and fed back to the user community.

Providing plenty of user support and education is especially critical in the early stages of the organization-wide rollout. Later, as the number of users grows and they become more adept to the new technology, companies often report a significant uptake in peer-to-peer support. After all, that’s what “social” is all about.

 

Technology – How to Manage the Enabling Technology?

Managing business technology is an area where most organizations have accumulated significant expertise. Yet, when it comes to deploying social technologies firms seem to approach the issue quite light-heartedly.

Many of the enterprise social technology initiatives today are powered by consumer technologies. Facebook enables companies to foster customer communities, Twitter helps provide aftersales support, while Google Docs and Skype facilitate work of virtual teams within and across firms. The ease of use, powerful capabilities, and accessibility of these technologies make it possible for anyone with an idea and enthusiasm to launch an initiative. The corporate IT department in this scenario is often being circumvented.

Reliance on consumer technologies to carry out business related projects and tasks is becoming widespread. So widespread, in fact, that in 2010 both Gartner and Forrester Research, being leading industry analysts, named consumerization of corporate IT as a technology trend of concern to both IT and business managers. As consumer technologies grow ever more powerful, rivaling and in some cases exceeding the capabilities of enterprise solutions, it is becoming increasingly difficult to keep end users away from them.

Consumerization of IT hence comes to its forefront in driving “social” initiatives in the enterprise. While not all negative – consumerization affords greater flexibility and fast ramp-up as employees get to pick the best means for the ends available – it also presents significant challenges. Consumer technologies are not built to meet often stringent corporate security requirements. They are difficult to scale to support a large number of enterprise users. And, consumer technologies usually offer little in terms of integration with existing enterprise IT infrastructure.

As social technologies continue their spread across the enterprise, spilling into core business functions and starting to affect core business processes, the need for integration, security and scalability will only increase. Fortunately, none of these issues are fundamentally new to organizations. The corporate IT function has gone a long way toward establishing best practices for dealing with these matters in the context of traditional business applications. While social technologies do present certain peculiarities, there is nothing on the technology side to suggest that established IT governance practices will not work in this new environment. Instead, the problem seems to be on the people side.

In the future, IT and end-users will need to come together to work out an appropriate solution. IT will have to accept the idea of empowered end-users spearheading business initiatives based on “do-it-yourself” consumer technologies. It should not block these technologies right away but thoroughly vet them to minimize risks and ensure integration. End-users, on their part, should accept greater responsibility for the choices they propose and collaborate with IT to help make their idea into a sustainable business solution.

 

Looking into the Future

How much does all of this apply to your company? It is true that the speed with which social technologies diffuse in different industries varies. Today, for instance, business-to-consumer sectors show a lot more activity along the customer interface in terms of “social” than business-to-business sectors do. Yet, we believe that regardless of the industry companies are no longer able to opt out of this unfolding shift.

Consider what drives the rise of social technologies in business. The millions of people spending hours a day on social networks, blogs, Wikipedia, Youtube etc. are not just impressive yet irrelevant statistics. These are your existing and potential customers, current and future employees, customers and employees of your business partners, as well as those of your competition. As these individuals grow accustomed to the power and flexibility of online social technologies in their personal lives, it is only a matter of time till they come to expect the same from your company. If these expectations are not met, they will either grow frustrated or start looking for a work-around.

The choice that managers have at this point, therefore, is simple. They may decide to take a proactive stance and start crafting the strategy and tactics for how to engage with social technologies. They can take advantage of the time still available today to experiment and tweak the governance framework to minimize risks and maximize value from “social” in their particular business context.

Or they may choose to wait till their customers, employees, and investors push them towards “social”. In this case, however, they must be ready to respond on the fly – without much planning or vision. They must be ready to wake up one day and repeat the words of a CIO of a large US company we recently interviewed: “This is just happening to me …and I need to do something about it!” The choice is up to you.

About the Authors

Evgeny Kaganer is an Assistant Professor at IESE Business School where he teaches MBA and executive courses in IT strategy, online business and Enterprise 2.0. His research focuses on online social technologies and their impact on individuals, organizations, and business models.

Sandra Sieber is an Associate Professor and Head of the Information Systems Department at IESE Business School. Her area of expertise centers on IT-enabled business models, with a special interest in social media and social collaboration. She has done extensive work on the transformational impact of IT in a number of industries, including Media and Entertainment, Retail, and Financial Services.

Dr Neil Hair is an Associate Professor of Marketing from the E. Philip Saunders College of Business at Rochester Institute of Technology, New York in the United States. He holds Chartered Marketer Status from the Chartered Institute of Marketing, a PhD from Cranfield as well as degrees from Sheffield and Cardiff Business Schools. His research and consulting activities include understanding perceptions of advertising and customer value in popular online social networks like myspace and facebook, personal branding in virtual space, virtual ethnography in popular worlds such as Second Life, and most recently a Cisco sponsored global study on social media use for collaboration and innovation looking at over 100 of the worlds thought leaders operating in this space.

 

 

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