Developing a Social Business Network

EMC Corp.’s social business network, called EMC/One, had been in place about a year when the economy turned sour. The developer of information infrastructure products was about to learn the value of a Facebook-like platform for use within the company.

As the economy spiraled downward in late 2008, EMC’s chief financial officer began issuing missives about things employees could not do or have—the eventual goal being to cut annual operating expenses of about $6.65 billion by $450 million in 2009. As grumbling in the ranks grew, one contributor to the social business network, already used by several thousand of EMC’s 40,000 employees, started a forum for workers to share and discuss ideas for cutting costs. 

According to Polly Pearson, then EMC’s vice president for employment brand and strategy engagement, employees offered ideas such as turning down the temperature by two degrees in winter. When the CFO got wind of the forum, she says, he read the postings and decided to adopt many of the ideas. Throughout 2009, the forum was the site of a collaborative exercise among thousands of employees around the globe to understand the reductions and to help meet the $450 million cost-cutting goal. Without a social business network, such an exercise would have been impossible.

“EMC/One was important in driving faster adoption and more broad-based understanding of the cost-cutting actions among our employees in a short period of time,” says Lesley Ogrodnick, a spokeswoman for the company based in Hopkinton, Mass. It is not possible to quantify the exact contribution of EMC/One to this cost-cutting effort, she says, but “it was instrumental in EMC’s ability to be more aggressive with the company’s cost-transformation program.”

Pearson, who recently left to form her own venture and continues to consult for EMC, sees the social business network as the latest—and most effective—variant of the networked organization. “It used to be two guys having lunch. Then it was e-mail,” she says. “Business gets done through networking, and these internal social networks are the widest and most inclusive way of doing that.”

Pearson says HR professionals must seize this chance to help make transformational changes. “Wake up, HR. This is the technology for you,” she urges. “The people subject is suddenly mainstream business.

“Be the expert.”

Mixing Messages

Social networking Web 2.0 tools are no longer used just to share photos, videos and palaver. While some companies, including EMC, use Facebook, LinkedIn and other social web sites for recruiting, branding and customer contact, many are rolling out similar tools internally for knowledge capture and sharing, informal learning, formal and informal collaboration, communication, and engagement.

Like public social sites, these business networks let employees post personal and professional information, and offer tools including blogs, so-called micro-blogs like Twitter, instant messaging, moderated communities or forums, wikis, video, photo sharing, and webcams to support real-time conversations. Many of the tools come in suites or integrated platforms.

Altogether, these tools allow employees to connect, communicate and collaborate. The trend is toward thinking of these as social business networks to distinguish them from social personal networks on the public web and any negative image that might imply.

An Aberdeen Group study of more than 500 organizations, released in June 2009 and titled HR Executive’s Guide to Web 2.0, notes that more organizations have workforces not located under one roof, spread out project teams, and workgroups that often include vendors and customers. The study concludes: “Business executives (HR and non-HR) are realizing that these new realities require a rethinking of the talent management lifecycle, and of the new tools they can use to manage this diverse and dispersed workforce.”

The study focused on 220 organizations that had adopted at least one social media tool. Researchers correlated the tools with their common applications for strategic actions, such as:

• Assisting with knowledge capture and transfer.
• Connecting employees.
• Providing project visibility for dispersed teams.

Expanding Possibilities

A few examples of the uses of social business networks illustrate the breadth of possibilities. The companies listed below use their networks in more than just the following ways:

• EMC uses its social business network EMC/One, a commercially available platform from Jive Software, based in Palo Alto, Calif., to generate ideas for its annual innovation contest. Employees post their best ideas for innovation with statements about how they relate to company strategy. Using the platform’s polling application, employees can “vote” on the ideas. In this way, each idea gets upgraded or downgraded. Eventually, great ideas get funded. But Pearson says managers don’t wait to see who wins before grabbing ideas and running with them. “You have people populating ideas, and others can engage and make them happen” she says.
• Gail Torreano, AT&T Corp.’s senior vice president for employee communications and corporate sponsorships, serves 280,000 employees worldwide. She uses employee profiles housed in T Space—the company’s social business network built from custom IBM technology—to locate native Spanish speakers to help her when she makes presentations to employees near headquarters in the Dallas area.
• At Atlanta-based Manheim Auctions Inc., a company with 30,000 employees that remarkets vehicles for auto dealers, manufacturers, rental car operators and others, several employee groups use Jive, according to Lilicia Bailey, senior vice president and chief people officer. About 150 members of the finance department in 76 U.S. locations were early adopters. E-mail had become cumbersome, and department staff members started an online community to share ideas. Identifying and standardizing best practices has been a goal.

Meanwhile, Manheim’s 200-person HR team is dispersed and includes staff in Australia. They use an online community to share ideas and develop a dialogue on common issues. For instance, they’re revising the employee handbook through “instant collaboration,” Bailey says. And, a group of assistant general managers at all offices are using the community function to discuss ways to transform the business in the future. These managers tend to be younger and comfortable using these tools, she notes.

• Kendle International Inc., a Cincinnati-based business with more than 3,500 employees, partners with pharmaceutical companies to help manage clinical trials. Employees set up a community site each time they launch a trial, according to Nathan D. Peirson, PHR, vice president of global HR. The HR department has its own site. Powered by Microsoft’s SharePoint Server and incorporating other tools, these sites are primarily used for document sharing.

Growing Returns

The return on investment from social networking tools is getting real.

Case in point: The pharmaceutical industry has sped up its research and development cycle due to collaboration on these networks, according to Joseph Press, a specialist leader for social media at Deloitte Consulting LLP. The finance, insurance and global services industries are also making good use of social business networks to improve internal and external collaboration, develop markets and products, and improve efficiencies and financial results, he adds.

A 2009-10 study by Towers Watson & Co. suggests that companies with the most effective communication strategies—which often include social media tools—posted higher returns for shareholders than companies with the least effective strategies. Researchers looked at data collected in April and May 2009 from 328 organizations that collectively represent 5 million employees around the world.

McKinsey Quarterly has been surveying executives about Web 2.0 tools for three years. In its most recent survey, 69 percent of respondents reported measurable business benefits from these tools, including more-innovative products and services, more-effective marketing, better access to knowledge, lower cost of doing business, and higher revenues. McKinsey Quarterly conducted the survey online in June 2009 and received 1,695 responses from executives across industries, regions and functional specialties.

Several adopting companies report improved employee engagement scores and better customer satisfaction survey results since they launched their social business networks.

The more employees connect, the more engaged they are—and that translates to better customer satisfaction, says Mary Ellen Marcilliat, SPHR, Manheim’s director of employee engagement and administration. “We have done four surveys and have seen a steady increase across the business and higher levels of participation,” she adds.

Promoting Good Behavior

While internal social networks are modeled after public web sites, Manheim and others realize that the tools have distinct business purposes. There’s growing evidence that many executives understand this, according to David Coleman, managing director of Collaborative Strategies LLC in San Francisco, a research and consulting firm.

In Coleman’s 2009 survey of executives at enterprises with 1,000 or more employees, about one-third had implemented some social media tools and one-third were planning to in the next 12 months. In this year’s survey, 
48 percent had implemented some tools and 25 percent were in the process of doing so.

Towers Watson consultants note similar patterns. “We did series of breakfast meetings on social media with our customers” among theFortune 500, says Adam Wootton, a senior consultant for social media. “We found 60 percent to 70 percent among a couple of hundred that were piloting initiatives. About 10 percent had full-scale deployment.”

One concern his clients raise, Wootton says, is that employees will make frivolous use of internal social networks and communicate inappropriately. “This is the biggest expressed fear, but it is a complete non-issue,” he argues. “Their frame of reference is the public Internet, where people can join Facebook under a false name and publish whatever they want.”

In contrast, companies always require full names be used, thereby mitigating inappropriate use, he adds. On the rare occasion when there is inappropriate use, “you deal with it under the employee code of conduct.”

Among the 10 adopting organizations whose managers were interviewed for this article, none reported egregious inappropriate use. Because they are public within the company, social business networks may be more immune to inappropriate content than other modes of communication.

NetApp Inc. of Sunnyvale, Calif., a developer of storage and data management products, launched its first collaboration communities on Jive more than two years ago for its 8,000 employees, according to Francesca Karpel, senior manager for internal communications. Soon after, concerns arose about inappropriate conversations. “We couldn’t find them,” she says. “The conversations referred to were actually in e-mails. I can’t think of anything internal we’ve had that was offensive on our social network.”

Karpel says the company has worked with HR professionals and legal counsel to benchmark social media guidelines and issue a policy on employee use. “Most companies have policies that already cover this stuff,” she says.

Shifting Control

The real hurdle is transitioning from command-and-control to a more transparent, open and collaborative way of working. Even companies such as EMC, whose employees thought of themselves as collaborative before these tools existed, are learning how far they have to go.

“We need to ‘un-teach’ command-and-control,” Pearson says. “Rigid adherence to command-and-control thinking is big barrier. Collaboration is about behavior, not tools.”

At Deloitte, Press and his colleague Jeff Schwartz, principal for global and U.S. leader talent services, have long pondered this issue.

“This use of technology is not a simple extension of the way work was done before,” Schwartz says. “The introduction of social media to HR or to collaboration and innovation has an underlying shift that is much greater than the technology.”

He says organizations need to make two changes, as explored inThe Power of Pull (Basic Books, 2010), published by leaders from Deloitte’s Center for the Edge. Those changes include moving from:

• The corporate hierarchical ladder and control environment to a corporate lattice, shifting from vertically oriented to a horizontal or matrix orientation.
• An organizational push model to a pull model. In the push model, the focus is on linear processes, hierarchy and control.

Because of these social media tools, people can interact in more fluid, dynamic and spontaneous ways. “When there are adoption problems, most of the problems are really more related to the ladder vs. lattice challenge and not to the technology,” Press says.

Pushing the Limits

HR and other business leaders acknowledge that they struggle with the changes social networking has wrought.

“Social media is rapidly changing the environment,” says Julie Grzeda, senior HR manager for information technology sourcing and initiatives. She is involved in managing GE Connect, the social business network General Electric Co. began rolling out to its 300,000 employees in March 2009. “What people think of as collaborative can be so much bigger. It is a matter of degree.”

Even with a long record of innovation and collaboration, GE employees still have progress to make, she says. “We continue to push the limits on collaboration all the time. What this technology allows us to do is be more natural, more every day, and break more and different boundaries. The likelihood to get a cross-business team on something is greater now.”

When assessing business leaders’ potential, GE now includes an assessment of their comfort levels with and their use of social media tools, she notes, adding that “Leadership for the 21st century is about being able to be connected, listen, respond.”

Memphis, Tenn.-based FedEx Corp., with a workforce of 280,000 employees, still has a traditional management approach, according to Diane Terrell, vice president of strategic communications, and leader of a cross-functional team that is pilot-testing several applications for its social business network.

“We have a command-and-control culture. For example, specific people are authorized to speak on behalf of the company. For a long time, people not accustomed to commenting publicly didn’t trust it was OK to engage with social media,” she explains.

Terrell says the behavior change must come first. “Our focus is less on the tools and more on information, knowledge and learning to leverage the tools. We are more focused on behavior.

“Collaboration is a business imperative,” she insists. “That imperative comes first. Social media as a solution comes second.”

The author is technology contributing editor for HR Magazine and is based in Silicon Valley in California.