Social media on the inside: Are firms missing the point?

22nd Jun 2009

By enriching the employee experience with imaginative social media platforms, interactions and relationship capital can be measured and customers get the benefits of employees’ new levels of energy and enthusiasm, explains Leon Benjamin.

Are customers suffering from ‘work rage’? This phenomenon hit the news as far back as 2001 when Gallup surveyed 1.4 million workers via 100,000 divisions in North America and Europe. They discovered that 17% found work satisfying, 63% were not committed and actively looking elsewhere and 20% were disenchanted, disaffected and often militant in expressing dissatisfaction. Also reported at this time, 80% of men and 71% of women were unhappy with the number of hours they work and 72% of managers were criticised by family and friends for overwork - all this resulting in a one in five chance of a customer interacting with a disaffected employee and, crucially, the loss of a valuable customer relationship.

A few years later the UK Work Foundation conducted an applied research programme with Sainsbury’s to discover the impact on profit and loss of a highly satisfied employee workforce. It focused almost exclusively on customer-facing employees in the store and in contact centres. The research unequivocally demonstrated a bottom line impact in profit terms to a business with ‘happy’ employees. 
In both these scenarios, there’s a common thread around the value of interactions, of customer interactions, of relationships formed, or what our accountants define as relationship capital or intangible assets. These assets contribute as much as 70% to the share price of a company and, yet, there is no widely accepted way of measuring them. 
The Enron effect
A prolific amount of academic research is being done in this area, partly driven by mandates in the US Sarbanes-Oxley Act, created to er, prevent collapses like Enron and Andersens from happening again. Interestingly, post mortems following Enron et al revealed that ‘chatter’ in online groups predicted the collapses as far back as two years before, with stunning accuracy of the people and companies involved. What is the value of these intangible assets (‘markets are conversations’) given the cost of the company collapses to people’s individual wealth and careers?
Social media is most transformative when deployed inside the company and the implications of its use are far reaching because it creates network-centric forms of self-organisation. The financial savings derived from the removal of ‘organisation and management overhead’ are extraordinary. People forget that Google, Amazon, Facebook and Yahoo could not exist without open source software. Open Source software has been made possible because contributors are peers arranged  as a ‘flat’, democratised, self-organising, self-directed network. The single biggest story in 21st century industry is the tectonic shift from command-and-control to peer-to-peer forms of production and collaboration, which, by definition, changes the very nature of capitalism to collaborative capitalism - but that’s another story. 
The tension that exists between these two models will continue for many years, with a great deal of resistance from the incumbents for whom this kind of change is a step too far. But globalisation between individuals rather than companies and nation states is unstoppable and some people will need to be dragged kicking and screaming. According to Paul Kleindorfer, director, risk management and decision processes centre, Wharton Business School: "The traditional theory of the firm is about the unitary, rational actor that more or less controls all the pieces of the puzzle that it needs in order to produce its outputs. Today, global companies are a part of a huge set of interlinked networks across the planet.” In other words, value is being created by any means necessary, no longer dictated by organisational relations and boundaries.
It should be obvious by now to most people that social software changes people’s behaviour. Most large companies try to mould employee behaviour in a wide variety of ways all of which try to raise productivity levels because higher productivity means more profit, right? With some intelligent, authentic approaches, companies can develop and design new ways of working - new models of work that massively raise levels of productivity by making layers of management surplus and irrelevant and, at the same time, removing the primary cause of workplace stress.
By enriching the employee experience with imaginative social media platforms, interactions and relationship capital can be measured and customers get the benefits of employees’ new levels of energy and enthusiasm. And the bottom line impact on profit and loss is dramatic.
Models of trust
I was told a story about BT’s response to an earthquake in Pakistan a few years ago. There was a mission critical need to restore telecommunication transmitters that served both business and government in the entire region. There was no time to implement formal project management disciplines. A leader was appointed and given carte blanche permission to select the resources needed and manage an open-ended budget. This leader built a network of expert volunteers from around the company, devolved decision making right to the edges of the project and gave groups of people permission to make decisions ordinarily made by weekly steering meetings. 
BT, in effect, adopted a network model of project organisation and delivery - a peer-to-peer model of working. It was, at that time, BT’s most successful project in every department; under budget, delivered early, few errors, no re-work, operationally stable. After this, BT were quite happy to continue with prevailing project management practices; over-budget, late delivery, scope creep, and so on. Why does it take a crisis to perform this well and is it possible to make this way of working the norm?
Well consider this: “The future of a company depends less on the nature of its issues and more on its capacity to invent social structures able to solve them”, according to Jean Francois Nobel. The adoption of social media in the workplace is of such strategic importance that it must start with discussions about behaviours and models of trust, and end with debates about software and platforms. That’s the point.

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