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Organizing the networked enterprise for change

By Jacques Bughin, Michael Chui, and Lindsay Pollak

Executives confirm that companies’ use of social tools is mainstream, though untapped value remains. The companies reaping the greatest benefits are especially good at implementing organizational practices that enhance these tools’ value, but even they have room to grow.

Year after year, majorities of participants in our research on social technologies have reported that their organizations use such tools in their business and that they see measurable benefits as a result—and according to our latest survey, these patterns continue.1 For the first time, though, the percentages of companies adopting these technologies and reaping related benefits seem to have plateaued. In 2013, 82 percent say their companies use at least one tool in their business (compared with 83 percent in 2012 and 72 percent in 2011), and 87 percent of those executives report at least one measurable benefit (compared with 90 percent the previous two years).

Nevertheless, the most recent results suggest that there are considerable opportunities for further adoption, within companies and with customers and business partners. They also shed new light on what the companies that reap higher-than-average benefits are doing right. According to executives, the organizations deriving the greatest internal and external benefits from using social tools (what we call “fully networked” enterprises) implement specific practices that support organizational changes, such as role modeling and building capabilities, more comprehensively than all others. The fully networked organizations are also more likely to establish formal strategies around the usage of social tools; taken together, these practices and strategies create an environment that’s better suited to achieving value from technologies. While there are still significant constraints on realizing the full potential of these tools,2 all organizations could be doing more. The responses affirm that companies have much more to gain from social technologies and that adopting some key practices can create measurable advantages.

Adoption plateaus, with room to grow

The shares of companies using some kind of social technology in their business, overall and on mobile devices, is high but leveling out. Eighty-two percent of respondents say their companies use at least one tool (compared with 83 percent in 2012), and 67 percent report the use of at least one tool on mobile (compared with 65 percent in 2012). The most commonly used tools—videoconferencing, social networking, and collaborative editing—are the same as we saw the previous year (Exhibit 1).

Still, there’s room to improve the percentages of employees who use these tools. Four in ten respondents say at least half of their companies’ employees use social networking for work, but less than 30 percent say the same about all other technologies. There are also opportunities to increase external use: 76 percent of executives say their companies use social technologies with customers, but on average their companies interact with only 38 percent of customers via social tools. Meanwhile, just 44 percent report using social technologies to communicate with partners, suppliers, or outside experts.

A vast majority of respondents continue to cite business benefits,3 while the mix of enterprises where executives report higher-than-average benefits, either internal or external, is consistent with 2012 results. One-fifth of companies qualify as fully networked organizations (Exhibit 2), those reaping the highest improvements in benefits from their technology use with internal and external stakeholders.4 Similar shares of organizations as in 2012 qualify as “internally networked” and “developing,” and a slightly larger share are now “externally networked” (which see outsize benefits from social interactions with customers, partners, and suppliers).5 On specific benefits, executives cite roughly the same improvements from their technology use as they did in 2012 (Exhibit 3).

Implementing the tools of change

Yet even at the fully networked companies, executives indicate that social tools offer further opportunities. Their responses help explain the difference between companies reaping the greatest benefits and all others: thoughtful application of the key tactics of organizational change and of strategies for using social tools.

Effective use of technologies is an organizational transformation in its own right that, in our experience, requires a shift in user mind-sets and behaviors. These shifts are best achieved through the “influence model,” a guideline for sustainable change that includes four key practices: using aligned systems and structures to reinforce change, role modeling, building capabilities, and fostering understanding of and commitment to change (see sidebar, “More on the influence model”).

The 2013 survey included questions to measure the link between the four practices and companies’ social-technology use. As the model would suggest, the executives from fully networked enterprises report that their organizations implement each of the practices more intensively than all other companies do (Exhibit 4). Additionally, the more practices a company has introduced in an intensive way, the likelier it is to be fully networked and reap outsize internal and external benefits (Exhibit 5).

At fully networked organizations, 65 percent of respondents say employees in at least two levels of their companies are role modeling effective use of social tools (compared with 37 percent at developing organizations), and these organizations are the most likely to have people role modeling in most positions in the enterprise (Exhibit 6). Fully networked organizations are also the most likely to reinforce change through systems and structures: 46 percent of executives at these companies say tools are highly integrated into employees’ day-to-day work, while just 19 percent say so at the developing organizations that are not seeing any outsize benefits.

On capability building, the share of respondents at fully networked companies who report the use of three or more methods to train employees on social tools (out of eight we asked about) is nearly twice the share at developing or externally networked organizations. To measure commitment to change, the survey asked which of four related statements describe respondents’ companies; 46 percent of fully networked executives agree with at least two statements,6 compared with just one-fifth of those at developing companies.

Beyond the influence model, companies’ deliberate strategy decisions matter as well. According to executives, fully networked enterprises are nearly twice as likely as developing enterprises to have a formal company-wide strategy for social-technology use. What’s more, the fully networked respondents are three times more likely than those at developing companies to say three or more of their individual functions (out of seven) have formal social strategies.

More organizational barriers to overcome

Executives expect that in the coming years, social technologies could enable large changes in organizational and management processes. But respondents still identify large gaps between the possibility for change at their own companies and at a company with no constraints on its technology use. As in the past two surveys, respondents believe that at their organizations, scanning the external environment, finding new ideas, and managing projects are the processes with the greatest potential to change through the use of social tools.

We took a closer look at executives who responded in 2011, when we first asked about future organizational changes, and who work for companies that are now reaping more benefits from social technologies than two years earlier.7 Compared with their responses in 2011, these respondents are now less likely to expect their own organizations’ processes (with the exception of project management) will evolve due to their use of social tools. What’s more, the gaps between potential process changes at their own companies and at hypothetical organizations without constraints have grown since 2011. There are some possible explanations for the growing disparity—for example, that executives are finding these changes difficult to implement, that changes take time to translate into measurable value, and that companies that have made strides have only scratched the surface, so executives believe that much more change is possible.

Looking ahead

  • Focus on organizational levers. To continue reaping real benefits from social tools—and to use them even more rigorously, to capture more value—companies at all stages of usage will have to back their deployment of the tools with the practices that support organizational change. In doing so, companies should examine how each element of the influence model can be best applied to enhance the value they capture from their use of social technologies.
  • Formalize strategy. The fully networked organizations seeing the greatest social-related improvements are also the most likely to have thoughtful, comprehensive strategies for technology use. Given the experimental nature of social technologies, it’s not possible (or even advisable) to think through all of their applications. But companies can still plan for their use of these tools, decide how to integrate them into important business problems, and determine where they can add value as early as possible.
  • Set high aspirations. While some companies are reaping the full benefits that social tools offer, many others should aim higher. Most companies could profit by reconsidering what’s possible beyond their current use of technologies. Managers may find that making small strides in increasing value can result in a whole set of potential benefits they did not see initially—whether it’s making specific processes more efficient, improving their workers’ overall productivity, or changing the competitive landscape in their industries.

About the author(s)

Jacques Bughin is a director in McKinsey’s Brussels office, Michael Chui is a principal of the McKinsey Global Institute and is based in the San Francisco office, and Lindsay Pollak is a consultant in the Silicon Valley office.