Companies Making Friends With Social Media

By Todd Henneman

Apr. 8, 2010

Social networks ranging from employee-only applications such as Deloitte’s D Street to public sites including LinkedIn continue to gain ac- ceptance as the business benefits become clearer.

Three recent surveys suggest how social networks contribute to the bottom line, but the studies also probe why some organizations struggle to tap their potential.

By 2014, social networking will replace e-mail as the primary form of communication for 20 percent of business users, according to Gartner Inc., a research and advisory firm.

Already, McKinsey & Co. has found that 69 percent of executives report that their companies have gained measurable business benefits, including better access to knowledge and higher revenue.

“Quite frankly, the companies that seem to have achieved the most are the ones that have been experimenting most deeply and for the longest amount of time,” says Michael Chui, a senior fellow of the McKinsey Global Institute.

A separate poll by the Human Capital Institute’s human resources membership found that, when counting both public sites such as LinkedIn and in-house applications, 49 percent of organizations use social networks somewhat. But getting employees to incorporate these sites into their routines remains a chief barrier to reaping the networks’ full potential.

“You have to ensure that people understand this is the place to go get answers,” says David Eisert, associate director of emerging technologies at Indiana University’s Kelley School of Business. “When you’ve got people in the network engaged, sharing information and openly communicating, that’s where the meat of knowledge transfer comes from.”

Companies that have invested in internal social networks have taken a variety of approaches to entice employees to create profiles and participate.

Deloitte pre-populated every profile in its D Street network with basic information drawn from its HR system.

“When we launched, we turned on profiles for all 46,000 employees,” says Patricia Romeo, D Street leader. D Street has been integrated into Deloitte’s internal portal, introducing mini-profiles of five colleagues each time an employee logs on. “It’s very much a Facebook-like experience,” Romeo says, “but all from the safety and security of behind the firewall.”

Sabre Holdings Corp., whose technology underpins travel reservations worldwide, created SabreTown, a social network accessed at least once a month by about 70 percent of its workforce. The company, based in Southlake, Texas, has 9,000 employees in 59 countries.

To encourage use, a team sat out in front of cafeterias and visited desks, taking and uploading profile pictures, says Erik Johnson, general manager of Sabre Holdings’ Cubeless, the software behind SabreTown. “It sounds like a silly little thing,” Johnson says. “But once that picture was attached to a profile, it’s amazing how much more likely users were to engage in the system and take ownership of that profile.”

Another challenge: demonstrating return on investment. In fact, not all of the early experiments with social networks have survived the recession. Dow Chemical Co. closed its My Dow Network, launched in 2007 to connect with retirees and former employees, because of “the global economic crisis,” spokesman David Winder says.

Allan Schweyer, principal at the Center for Human Capital Innovation and former executive director of the Human Capital Institute, says a vibrant social network could help with retention. But he concedes, “I don’t think there is going to be any great ROI measurement for corporate social networks anytime soon.”

Workforce Management, April 2010, p. 4Subscribe Now!

Todd Henneman is a writer based in Los Angeles.

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