Social networks - the new watercooler?

Now there’s a new place to hang out at work. Enterprise social networks provide an online environment where employees can get to know their colleagues, work together and exchange ideas.

Social media sites such as Facebook often pose a dilemma for employers, who fear such distractions may affect productivity.  But now companies have discovered they can use the same technology for their own purposes.

Enterprise social media – or the use of social media for business – is one of the fastest growing internet trends.  Tools like Yammer, Chatter, Jive and Sharepoint, all designed specifically for business use, are being used to link employees together to allow better communication and collaboration.

According to technology research company TechNavio, the global market for enterprise social media will achieve compound annual growth of over 50 per cent in the run-up to 2016, driven by the increased need for interaction between multiple teams in an organisation.

“Social media technologies provide an effective way for workers in different parts of an organisation or different locations to collaborate, share knowledge and discuss ideas,” says Marta Indulska, Associate Professor in Business Information Systems at UQ Business School.

“Because staff profiles are available online, people can easily track down individuals with the right skills. Company news can be posted online and the facility to give ratings or reviews allows staff to share opinions and give feedback on new products or ideas.”

The chemical company BASF launched its platform in 2008 and it is now used by 35,000 employees – almost a third of its global workforce. Users can network with colleagues, use status updates to tell others what they are working on, search for experts and ask for help with problems on the discussion forums. Wikis are used to assemble collective knowledge and there are different groups for subject experts, project teams, change management initiatives and even social groups.

While the majority of large companies are already using social media for business in some shape or form, a report by the McKinsey Global Institute in 2012 found that very few were anywhere near to achieving their full potential. It suggests that companies could raise the productivity of highly skilled professionals by 20 to 25 per cent.

Its report, The social economy: Unlocking value and productivity through social technologies, published in 2012, examines the potential for use in four sectors – consumer packaged goods, retail financial services, advanced manufacturing, and professional services. It found that, in these sectors alone, social technologies could potentially improve productivity by $900 billion to $1.3 trillion annually – mainly through improved collaboration and communication.

“The average interaction worker spends an estimated 28 per cent of the work week managing e-mail and nearly 20 per cent looking for internal information or tracking down colleagues who can help with specific tasks,” the report says. “But when companies use social media internally, messages become content; a searchable record of knowledge can reduce, by as much as 35 per cent, the time employees spend searching for company information. Additional value can be realized through faster, more efficient, more effective collaboration.”

However not all corporate networks are successful. IT research company Gartner says that 80 per cent of projects will not achieve the intended benefits in the coming years. “Successful social business initiatives require leadership and behavioural changes. Just sponsoring a social project is not enough — managers need to demonstrate their commitment to a more open, transparent work style by their actions,” says analyst Carol Rozwell.

Professor Indulska agrees. “Many companies struggle to get their employees to actively participate because it’s yet another site that needs to be checked for information and the benefits are not clear. Imposing rules about the minimum number of times staff should post typically results in poor uptake and resentment. The benefit needs to be made clear to staff in terms of how it will make their job more effective.

“The organisation should also have a clear strategy and understanding of what benefits it wants to achieve. It’s a good idea to start small, for example, within a specific project or team, making sure that team leaders and project managers are actively involved and lead by example. The successes of such smaller projects can then be communicated throughout the organisation prior to expanding the use of the network.

“Introducing an enterprise social network may be a struggle, but if it is successfully adopted, your efforts will pay off by helping to reduce communication and collaboration silos within the organisation, and increase information and knowledge sharing.”

Last updated:
27 February 2019