McKinsey Research Again Validates Social Technology Benefits

Here are highlights from the fifth annual McKinsey study, “How social technologies are extending the organization” (registration required). McKinsey’s groundbreaking research in this area has consistently demonstrated that companies that leverage social technologies most aggressively see the payoff in market share gains, improved productivity and higher customer satisfaction. However, the research also indicates that becoming a fully networked organization is difficult, and remaining fully networked may be even harder.

Seventy-two percent of the respondents report that their companies are deploying at least one technology, and more than 40 percent say that social networking and blogs are now in use.

Executives at internally networked organizations note the highest improvement in benefits from interactions with employees; those at externally networked organizations, from interactions with customers, partners, and suppliers.

Executives at fully networked organizations report greater benefits from both internal and external interactions. Developing organizations [those with the lowest rate of social media adoption] report lower-than-average improvements across all interactions at their organizations.

Self-reported operating-margin improvements correlated positively with the reported percentage of employees whose use of social technologies was integrated into their day-to-day work.

Market share leadership in an industry, the final self-reported performance measure, correlated positively with the integration of social tools in employees’ day-to-day work.

Roughly half of the internally and externally networked enterprises slid back into the category of developing organizations; that is, they did not maintain the benefits of using social technologies that they had achieved earlier…It appears that it is easier to lose the benefits of social technologies than to become a more networked enterprise, which suggests that significant effort is required to achieve gains at scale.

The respondents affiliated with fully networked organizations are the likeliest to believe that greater process change will occur in their own organizations. In larger numbers than respondents in other clusters, they think that social technologies will lead their companies to adopt entirely new processes under current conditions and to do so even more aggressively if all constraints were removed.

They say that with fewer constraints on social technologies at their companies, boundaries among employees, vendors, and customers will blur; that more employee teams will be able to organize themselves; and that data-driven decision making will rise in importance.

Organization Type, Based on Social Media Benefits