Organizing for change through social technologies

While the percentage of companies adopting social technologies remains high, it has plateaued. After seven years of research on the use and benefits of social tools, respondents to our latest survey¹ 1. The online survey was in the field from June 11 to June 21, 2013, and garnered responses from 2,690 executives representing the full range of regions, industries, company sizes, tenures, and functional specialties. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP. have for the first time reported no growth in the share of organizations deploying such technologies. Yet there remain significant opportunities for further adoption—and considerable value to capture—particularly among companies’ own employees and with business partners. The results suggest these technologies can facilitate substantial organizational change, provided that companies approach social tools as they would any large-scale transformation. Indeed, the companies reaping the greatest benefits from social interactions with both internal and external stakeholders (what we call “fully networked” enterprises) already implement the key practices that support organizational change more comprehensively than all others do. Still, all executives note barriers to realizing the full potential of social tools, and all organizations could do more to generate value.

Adoption slows, despite room to grow

The shares of companies using social technologies in their business 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 last year). The most commonly used technologies are videoconferencing, social networking, and collaborative editing, which we also saw last year (Exhibit 1).

1

Videoconferencing and social networks are used most often in the business.

Still, there’s a lot of room to improve overall adoption, particularly within the organization. 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 deploy social tools to communicate with customers—the most common reason for using these technologies—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,² 2. In this year’s survey, 87 percent of respondents say their organizations see at least one measurable benefit from social tools, roughly the same share as in the previous three surveys. and the mix of enterprises where executives report higher-than-average benefits is consistent with last year. 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,³ 3. After the 2012 survey, we reported that 10 percent of respondents worked at fully networked organizations and 29 percent at externally networked enterprises. These figures resulted from a methodology that was inconsistent with what had been used in previous years, and they have been revised accordingly. See Jacques Bughin and Michael Chui, “Evolution of the networked enterprise: McKinsey Global Survey results,” March 2013. while the share seeing outsize benefits from internal company use (12 percent) remains small.⁴ 4. Based on the average level of improvements in reported business benefits, internally networked organizations see outsize benefits from social interactions among employees, while at developing organizations, respondents report lower-than-average improvements across their organizations’ social interactions. Again, given the large amount of value that social technologies could create through internal use, there is significant room here for companies to grow.

2

One-fifth of organizations are ‘fully networked,’ which see outsize benefits from internal and external social interactions.

Implementing the tools of change

To capture this potential value and take advantage of further opportunities, the responses from executives at the fully networked companies suggest one way that all other organizations can begin to improve: thoughtfully applying the key tactics of organizational change and strategies for using social tools. Since we see the effective use of technologies as an organizational transformation in its own right, it requires a shift in user mind-sets and behaviors within the enterprise itself. These shifts are best achieved through the four key practices of the “influence model”: using aligned systems and structures to reinforce change (including the integration of tools into day-to-day work), role modeling, building capabilities (through formal and informal training methods), and fostering employee understanding of and commitment to change.⁵ 5. For more, see Carolyn Aiken and Scott Keller, “The irrational side of change management,” McKinsey Quarterly, April 2009.

This year’s survey included questions to measure the link between these practices and companies’ social-technology use. As the model would suggest, executives from fully networked enterprises report that their organizations implement each of the practices more intensively than all other companies do—especially compared with developing enterprises, which see no outsize benefits (Exhibit 3). 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 4).

3

Fully networked companies most rigorously implement the actions that support organizational change.

4

The more intensive pursuit of change activities links to greater benefits from social tools.

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 5).

5

More frontline employees, middle managers, and senior executives at fully networked companies role model the use of social tools.

Beyond the influence model, companies’ deliberate strategy decisions matter, too. 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 now see more social-related benefits than two years ago.⁶ 6. For example, these would include organizations that fell into the “developing” category in 2011—based on respondents’ reporting of the scope of benefits their companies received from their use of social technologies—that are now either internally, externally, or fully networked. 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 the companies making 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 workers’ overall productivity, or changing the competitive landscape in their industries.