Social Business: What Are Companies Really Doing?
Deloitte Insights video
There’s no doubt that social networking platforms such as Facebook and Twitter have transformed social norms and politics around the world, but the effect they’ve had on business is less clear. A study by the Massachusetts Institute of Technology Sloan Management Review (MIT SMR) and Deloitte sheds some light, finding that, while experiments and pilots are prevalent in organizations today, social business is expected to gain even more importance in the next three years. Learn more about the study – which includes insights from more than 3,400 survey respondents from 115 countries and 24 industries – in this episode of Deloitte Insights.
David Kiron, Executive Editor of Innovation Hubs, MIT Sloan Management Review
Doug Palmer, Principal , Deloitte Consulting LLP
It is time for Insights, a video news production of Deloitte LLP. Now, here is your host, Sean O’Grady.
Sean O’Grady (Sean): Hello and welcome to Insights. Today, we will be discussing corporate social business strategies and the results of a year-long collaborative study on the topic by the Massachusetts Institute of Technology Sloan Management Review (MIT SMR) and Deloitte. Now joining us in New York to examine the survey results are David Kiron, Executive Editor of Innovation Hubs at MIT Sloan Management Review, and Doug Palmer, a Principal at Deloitte Consulting and leader of Deloitte’s Social Business Practice. David, I feel like the logical place to begin is to understand what prompted this survey. So, why do it now and what industries were you looking at?
David Kiron (David): As you know, there has been a rapid adoption of technology-based social networking like Facebook and Twitter that has been transforming social norms and politics around the world for the past decade. The question is, “Is it affecting or having any kind of an impact on business?” Sloan Management Review focuses on management practice and significant trends that are impacting how managers practice their craft, so we sent out a survey asking questions to industries around the world and got back 3,500 respondents from 115 countries and 24 different industries with a lot of intriguing insights into how companies are grappling with social business.
Doug Palmer (Doug): From a Deloitte perspective, I think the key piece was our clients were starting to ask more questions, and we saw that it was not just a single industry that was interested. So, by teaming with MIT Sloan Management Review, we were able to look cross-industry. We were also able to understand what was happening in the C-suite. We really were curious about how relationships were changing. How was the CEO engaged? How was the CIO playing a major role? What were the roles of CMOs and CFOs going to be? So that is another piece that we were able to take a look at during the study.
Sean: 3500 respondents, so it sounds like a pretty big pool. What were some of the key findings that we pulled from this?
Doug: I think one of the key findings that jumped out is that people are getting value from social business today. Now, there are clearly some industries – media and telecom and technology – that are leading that charge. And, if you look at consumer-facing industries, you would expect them, given what David described in terms of Facebook and Twitter and in the social channels people use in their everyday lives. And I think one of the central themes was, “Are businesses going to be able to also see that value? As you look at social technologies and enterprise collaboration tools, will those same type of uses translate into business value?” What we saw was that there is value today as people look forward and project out three years, and that this is going to be a very large piece of work that gets done in corporations.
Sean: We talked a little bit about the industries that are gaining value. Can you talk about what kinds of value they are gaining from it?
David: We found value being derived from four different places within the organization: First, marketing, which is the most commonly acknowledged place where social media has played a role in organizations. But we have also found that leadership is also being influenced by the social trends as well as operations and innovation. Those are the four big areas where we are seeing value being derived from organizations.
Sean: How is that being measured? Because, if we are saying the survey is revealing value, how are we establishing that value is in fact happening?
Doug: That was a key question that we did ask and there are really two pieces to that. One is whether somebody at your organization in charge of social business, or is it an extra duty assigned? What we found was that some companies are actually starting to assign someone to that role and then we asked the question, “Are you measuring it?” One of the most interesting findings – that we had a lot of debate about – was that the people whose job it is to measure, are actually are not measuring it. It led us to say, “How is that?” And one of the things that we concluded is that social business is at a very early stage. People are doing pilots and doing experiments, but the ability to actually measure is quite challenging. What we are going to see is that this is a journey, not a single event, and that the companies with successful measurement programs had been in for a very long time – for five or seven years and started their journey very early.
David: When we asked respondents, “How important is social business to your organization or social software to your organization?” only 18% said social software was important to their organization today. But, looking out three years, they said social business was going to be important at a rate of 63%. So, in just three years, they are expecting it to become a lot more important.
Doug: And if we look at the sectors or the industries that saw the least value today, they are energy, manufacturing and financial services. I have a great example from the energy sector with the convergence of technologies. In one of the our previous podcasts, we talked about cloud, mobile, social and analytics in the postdigital environment; in this case, we had smart meters that now had come online in the energy sector and they provided data that you did not get on your energy bill before. They gave the energy company a way to interact with their clients in a very different way – they started social channels talking about power outages, and people were reporting them. They started actually using gamification, which is a technology that we wrote about in Tech Trends 2012 this year. They started to talk about how you get people engaged. They had neighbors looking at others’ power usages, asking why their power bill twice as high as their neighbor’s? And they started to interact and look at saving power, and then they used the social piece of that to bring communities together to compete for laptops for schools. And so we found a very energized energy executive that was using social technologies to change customer relationships, sharing of information, and being very transparent with the customer.
Sean: We still have a little bit more time. David, are there any examples that jumped out at you?
David: There is a wonderful example from the insurance sector where somebody’s RV had broken down, and they called into the call center and asked to find out whether their policy covered this kind of breakdown, because from the policy it was not entirely clear. And then, because of the unusual circumstances – the person was on vacation – the person at the call center did not know either. But using an internal collaboration platform they sent this question out: Is this situation covered by this particular policy? And they had people from all over the organization writing in, from claims, from a number of different parts of the organization, and they ended up solving the problem in 30 minutes. And this was something that they would have solved in over maybe a day.
Doug: If they could have even solved it.
David: Yes, if they could have even solved it.
Sean: Something that would have had an angry customer on the sidelines for the day, solved in 30 minutes.
Pretty exciting stuff. My last question for you is about the stumbling blocks. So, it sounds like you had a qualitative and quantitative survey here. What did you hear back in terms of barriers to entry? What is preventing organizations from making it to the beach and playing in social business strategy?
Doug: I think there are several pieces to that. I think the most important thing we saw was having leadership support. Leadership was central to this. Having a social business strategy tied to obtaining business value was a second piece that was loud and clear. People that felt they were achieving it had those two components. The question of, “How do you start?” is not something that you have to plan for 12 months or two years. You can start today. One of the things that we suggested through the findings is to start collecting social data, start trying to connect it to your enterprise, and start looking for those opportunities to have some quick wins.
Sean: Thank you both very much for your time today. Interesting stuff. Okay, we have been discussing social business strategies with David Kiron, Executive Editor of Innovation Hubs at MIT Sloan Management Review and Doug Palmer, a Principal at Deloitte Consulting. If you would like to learn more about David, Doug, or the results of their survey, you can find that information on our website, its http://deloitte.com/insightsus. For all the good folks here at Insights, I am Sean O’Grady, we will see you next time.
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