A number of would-be business oracles have looked deep into their crystal balls and foreseen the end of social business. In some cases, they split hairs to say that standalone social business is dying, or are just saying social business is dying as a trick to capture readers, or they are pointing out some specific missing piece in an idealized social business architecture. These are either people advancing their own particularized take on social business, or positioning a tool as being better than other social business solutions.
McKinsey’s recent report, The Social Economy, makes it clear why social tools are making inroads in business. Here are just a few of the key findings from that report:
- The speed and scale of adoption of social technologies by consumers has exceeded that of previous technologies. Yet, consumers and companies are far from capturing the full potential impact of these technologies. Indeed, new uses, technical advances, and social business models will evolve—driven by user innovation and advances in technology. Almost any human interaction that can be conducted electronically can be made “social,” but only a fraction of the potential uses have been developed (e.g., content sharing, online socializing). Today, only 5 percent of all communications and content use in the United States takes place on social networks.
- Several distinct properties of social technologies make them uniquely powerful enablers of value creation. The most fundamental is to endow social interactions with the speed, scale, and economics of the Internet. Social technologies also provide a means for any participant to publish, share, and consume content within a group. They can also create a record of interactions and/or connections (a “social graph”) that can be used by consumers to manage their social connections and by others to analyze social influence. Finally, social technologies can “disintermediate” commercial relationships and upend traditional business models.
- Based on in-depth analysis of usage in sectors that represent almost 20 percent of global industry sales, we identify ten ways in which social technologies can create value across the value chain. Each industry’s specific characteristics determine which levers will be most impactful. Overall, we estimate that between $900 billion and $1.3 trillion in value can be unlocked through the use of social technologies in the sectors we examined. (This range represents the maximum value that could be created if all participants fully implemented social technologies—and complementary organizational changes—and if all time and money saved by social technologies were applied in the most productive ways).
- Two-thirds of the value creation opportunity afforded by social technologies lies in improving communications and collaboration within and across enterprises. By adopting these organizational technologies, we estimate that companies could raise the productivity of knowledge workers by 20 to 25 percent.. However, realizing such gains will require significant transformations in management practices and organizational behavior. Social technologies can enable organizations to become fully networked enterprises—networked in both a technical and in a behavioral sense.
Any technology or set of business practices that can yield a trillion dollars in value will not be abandoned, even if adoption takes time and effort. While I continue to push the boundaries of our thinking about social — even as far as saying they we have to move beyond the principles and premises that define social platforms today — I never suggest that social business as an idea or movement will die. On the contrary, we simply need to expand our understanding as more people and companies join in the use of social tools in the business context.