How Social Is Being Used To Drive Business

How are social networking and social software impacting businesses now and in the future?

A new research report co-authored by MIT’s Sloan Management Review and Deloitte entitled “Social Business: What Are Companies Really Doing?” may have the answers.

The report surveyed nearly 3,500 managers from companies 115 countries in 24 industries, and conducted in-depth interviews with thought leaders and top business execs from major brands, including McDonald’s, IBM, SAP, Salesforce.com, and Yammer. Here’s a quick rundown of its key findings.

1. Social Business Matters Today- Will Matter Even More Tomorrow

• 52% of survey respondents believe social business is important to their business now; 86% acknowledge it will be important or somewhat important in three years
• The most important use of social software is for customer service, 2^nd most important use is to innovate for competitive differentiation
• Managers still see it as an external-facing activity

Bottom Line: Though not everyone sees it as important to their business now, nearly all managers agree that social software will become increasingly critical to their organization over the next few years.

2. Many Leaders are Enthusiastic, but Lack Metrics to Prove Value

• Leadership and clear vision recognized as key to social software adoption
• Biggest barrier to adoption: lack of management support. The most common answer to the question “How do you measure social software use?” was “do not measure”
• CEOs, presidents and managing directors are 2x as likely as CIOs and CFOs to say social business is important to their organization

Bottom Line: Metrics may not be as important when companies are experimenting with social software, but as it becomes more widely used, metrics must be in place to assess progress and encourage successes. Social business depends on leadership; leaders can benefit from social business.

3. Different Perspectives Based on Size of Organization

• Respondents from small (fewer than 1,000 EEs) and large (over 100,000 EEs) companies were twice as likely as managers of midsize companies to acknowledge the importance of social business
• When asked the importance of social business three years from today, all groups answered similarly

Bottom Line: social tools allow small companies to look bigger than they are; large companies appear more human and approachable. Midsize companies see the advantage of social tools, but don’t see themselves exploiting them for three more years.

4. Social Business Getting Most Traction in Media and IT Sectors

• Almost 75% of managers from Media companies say that social software is at least somewhat important to their organization today; nearly 66% of managers in the Tech industry say the same
• Managers from the Energy and Utilities (7.1), Financial Services (10.4%), and Manufacturing (9%), industries are least likely to say that social software is important to their organizations. However, managers from all three segments acknowledge that it will be much more important in three years

Bottom Line: Certain industries are seeing more value in social tools than other industries. But even managers from industries that place a low premium on social software today agree that social tools will be much more valuable in the near future.

Ultimately, small businesses are using social to amplify their reach. Larger organizations are doing so to humanize their brand. It’s great to see that mass adoption of social for marketing is finally nearly here!