The State of Social Business 2013

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Altimeter hosts an annual Social Business survey to learn how social media is evolving within enterprise organizations. Data is then compared to previous reports providing a sense of movement to the numbers and also a developing benchmark for our analysts and clients. Our last survey was studied in Q3 2013 and also Q4 2012, the latter was used to provide context to a report published by me and Brian Solis in our report, “The Evolution of Social Business: Six Stages of Social Business Transformation.”

We are now making the data available to the public for free use under Creative Commons (cc) as part of our Open Research program. The figures included in this report are also compared to previous survey findings from 2011 and 2010. There are two publications available, which are embedded below as well — there’s a report with some analysis and we’ve also just published a PowerPoint deck so that you can easily incorporate the information in your presentations. All we ask is that you properly attribute the research back to Altimeter.

Overall, we found that investment in headcount and infrastructure have steadily grown, as companies reach “intermediate” stages of social business. Several are turning their sights from “social media” as an extension of marketing and communications, and seek to push a “social business” agenda throughout the organization. Top findings include:

  • Most organizations are “intermediate,” with only 17% self-described as “strategic” in the execution of their social strategies.
  • 78% of companies have a dedicated social media team, at the division, corporate or both levels — only 22% of companies do not have a dedicated team.
  • Companies are committing more headcount to social media across all sizes of organizations. The biggest jump is for companies with more than 100,000 employees, which now report an average of 49 full-time employees supporting social media, compared to 20 in 2010.
  • 85% of companies have an organizational social media policy, yet only 18% of companies report that their employees’ knowledge of social media usage and the organizational policy is either good or very good.




The Twitter IPO: Some Initial Analysis

Twitter just tweeted that it has filed a confidential S-1, with the appropriate disclaimer. Here are a few reasons why this filing and IPO warrant close scrutiny.

  • Twitter is the last of the Big Four to go public. In the social networking ecosystem, Twitter is seen as a must have in terms of a social strategy, and is the only major player left that is still up for grabs — YouTube (owned by Google), LinkedIn (IPO), and Facebook (IPO) are all spoken for. Other upstarts like Pinterest are just getting started so Twitter is going to be the talk of the town into 2014, which is the earliest the IPO can be expected. There will be a certain “last call” mentality to the Twitter IPO that wasn’t there for Facebook.
  • Confidential filing gives Twitter control. Twitter took advantage of the JOBS Act pass last year, which allows firms with less than $1 billion in revenue to file an S-1 confidentially. This means that unlike Facebook, Twitter won’t be subjected to a microscopic dissection of every word of its filing. This is a good thing, because Twitter’s business model isn’t the easiest to explain. As Twitter begins the roadshow, they’ll be able to roll out their story to investors in a systematic, orderly way that enables them to tell their growth story to the world.
  • Timing and Friends benefit Twitter. Twitter should be saying a big “Thank You” to Facebook for carving out the path before them. Facebook has spent the past year educating the market about social media advertising, doing much of the heavy lifting and laying out the red carpet for Twitter.
  • Challenge: Twitter’s Advertising Model. The biggest challenge that Twitter has is that its main form of revenue comes from “sponsored tweets” which is a form of native advertising (see Altimeter’s just-published report on Native Advertising). The problem with these sponsored tweets is that they are not, at present, a standard ad format that can travel outside the Twitter platform. That makes ad buying — and scaling to media buyers — more difficult.
  • Discipline to Stick to the Business. The tweet that Twitter posted one minute after the “filing” one shows everyone at the computers with the next, Now, back to work.” The company has been preparing for this day, and realize that it’s a long, long slog for the next approximately six months before the actual IPO. The team will need discipline to focus on the work, rather than pulling out spreadsheets to calculate their potential net worth. Not an easy thing to do!

These are still early days, and I anticipate that we’ll learn a lot more about Twitter’s business over the next few weeks and months. I, for one, am eager to not just see the numbers, but also to hear their story. Because as one of the four foundational platforms of the social space, they have the ability to shape the future as they envision it unfolding. And the vision that Twitter CEO Dick Costello and his team roll out is sure to be interesting.

New Book: The Seven Success Factors of Social Business Strategy

I’m very proud to announce the publication of an eBook that I co-authored with Brian Solis, entitled “The Seven Success Factors of Social Business Strategy“.

Based on research as well as real-world experience with our clients, Brian and I found that there are common characteristics of successful social business strategies, the most important one being a laser focus on achieving business goals. In fact, the most successful businesses are those with an executive who can articulate the vision and strategy roadmap almost as well as the social strategist.

Here’s a summary of the Seven Success Factors of Social Business:

1.  Define the overall business goals. You can’t align your social strategy with your business objectives if you don’t even know what your objectives are.

2. Establish the long-term vision. If you’re not striving toward the end goal, you’re likely to veer off the path. If you want your team to fully invest in your social strategy — and you need the support of your entire team– you’ll need to communicate your vision with clarity and passion.

3. Ensure executive support. In the early days you may be able to fly under the radar, but at some point, if you want to truly have an impact on the business, you’ll need the backing and support of key executives.

4. Define the strategy roadmap. You already know your business objectives and have a clear vision. But how are you going to get there? Plan out your route, what roads you’ll travel, and what roads you’ll avoid.

5. Establish governance and guidelines. Who is responsible for executing the social strategy? What’s your process of listening and responding to your customers? If you clearly define this process and then stick to it, you’ll spend less tie floating along throughout the social sphere and more time strategizing your social growth.

6. Secure staff, resources, and funding. In the early stages of social growth, you might outsource your social media campaign to an agency, and that’s fine. But you should also be looking down the road and planning to develop internal resources to take your company to the next level as your social prowess — and your business — grows.

7. Invest in technology platforms that evolve. Resist the temptation to jump on the latest technology bandwagon before you have a long-term strategic plan in place. Hold off on making significant technology investments until you’re equipped with a sound vision and strategic plan.

The organizations we studied didn’t necessarily have each of these success factors fully developed; rather, we found that it was much more important that each factor was aligned with immediate and long-term business goals.

So ask yourself — how robust is your social strategy? As you look at each of the elements above, consider how well you are doing in each area. Score your social strategy on each factor on a scale of 1 (not doing it well at all) to 5 (knocking it out of the park). In the spirit of open discussion, I’d love hear how you scored yourself — where your strategy is strong, where you need to improve.

In the book, we go into detail about how to approach each success factor, illustrating the key elements with best practices and exercises, as well as common mistakes to avoid. One of my favorite sections is how to convince and even rally decision makers at the executive level. Brian and I also designed the book to be a quick but useful read — at only 100 pages it’s something that you can give to your team and executives and reasonable expect that they will actually read it!

Our hope is that the book will help you move from having a pile of social media tactics to having a social business strategy around which your entire organization is aligned. And if you need additional help crafting that strategy, Altimeter can also help with our Social Business Strategy service offerings.

More information and additional resources:

Upcoming Webinar: Thursday, August 15th 10am PT/1pm ET. Registration and details.

 

How To Create A Successful Social Business

Are you a social business? By this, I mean are you aligning your social strategy to business goals? In a new Altimeter Group Report, “The Evolution of Social Business“, my co-author Brian Solis and I found that this was not the case. Only 34% of businesses we surveyed felt that their social strategy was connected to business outcomes. Brian goes into detail about our findings in this post.

Our research found that organizations typically go through six stages of social business evolution. But this doesn’t mean that you have to wait until Stage 6 to realize business impact. Rather, it’s not only possible but crucial to focus on achieving business results right from the very beginning. The six stages are as follows (for a deeper dive into each, please download the report):

A great example of this from the report comes from Shell. They launched the Shell Facebook presence only in January 2012 and they mostly post content on the page and moderate comments. But they see tremendous benefit from this activity because their business goal is to understand and improve their reputation with customers and partners. They ask the question, “To what extent is Shell meeting customers’ energy needs in socially and environmentally responsible ways?” The key here is that this is not an effort isolated to Facebook — they measure reputation across ALL media channels so that they can see their activities impact reputation differently. Moreover, they measure this DAILY. Shell may be early in their social business journey, but they make sure that they see business impact from their efforts.

Creating Your Social Business Strategy

The focus on business goals is the key to having a coherent social business strategy, which we define as “the set of visions, goals, plans, and resources that align social media initiatives with business objectives”. That alignment and focus on business objectives forms the foundation for the strategy, no matter where the organization is on their evolution. Just 28% of respondents in our survey felt that they had a holistic approach to social media, where lines of business and business functions work together under a common vision. A mere 12% were confident they had a plan that looked beyond the next year. And, perhaps most astonishing, only half of all companies surveyed said that top executives were “informed, engaged and aligned with their companies’ social strategy.”

But there is hope. we found a set of best practices common across all development stages. We call these the Success Factors of a Social Business: 

  1. Define the overall business goal and align social media strategies against it.
  2. Establish the long-term vision for becoming a social business.
  3. Seek and earn key executive support and sponsorship based on the business case, not the trend.
  4. Beyond marketing and service campaigns, develop a list of prioritized initiatives that will demonstrate business value at the enterprise-level and in key functions/lines of business and plot them on a two-to-three year roadmap.
  5. Train and educate executives and employees not just how to use social media, but also how social media can impact business objectives and how to develop and run programs that do so continually.
  6. Get the right people involved at the right levels. An effective social business strategy takes a unified approach with cross-functional support. It’s a combination of social media savvy and business acumen.
  7. Invest in technology only after your vision and strategy are set. Technology and social media in general are only enablers to the overall mission and purpose you set forth.

Applying The Social Business Success Factors

From the research and from our work with clients, we have found that these success factors become especially important when the organization moves from one stage to the next. Some of the most common issues we’ve seen organizations face include:

  • Getting executives to buy into the social strategy — and fund it. Factors #1 and #2 which use business goals and a common vision to align the organization, become crucial. Sometimes this can be accomplished with a short education session, but more often, it requires that social strategy be built into the very fabric of the executive’s work and priorities. This is done only by strongly linking social activities to the 3-5 strategic goals that executives care about. If social doesn’t help the executive accomplish their mission critical goals, then it won’t ever make it on to their radar.
  • Creating a coherent strategy for social business. As crazy as it may sound, we’ve been working with clients to create three year roadmaps for their social business strategy. That’s not a typo, although it may seem impossible to do this in a fast-changing technology landscape. The key is to focus on the long-term strategic business goals of the organization and to make technology decisions ONLY after the vision and strategy are set.
  • Establishing governance. This is the perennial question, “Who owns social media?” This isn’t a simple issue determined by company size, maturity, or industry. It’s base much more on how the organization sees social playing a role in the company in the future, and creating a roadmap to bridge the reality of today to the future. One organization we worked with envisioned a multiple hub-and-spoke model with product and country teams. But to get there, they realized they needed to be temporarily centralized first, move into a basic hub-and-spoke with defined responsibilities, and a migration path for governance to pass into the spokes in a few years after training ensures that the skills and capabilities are in place.
  • Engaging and transforming the organization. This is perhaps the most challenging problem facing senior executives — they see the need to redesign and retool the organization for greater flexibility, adaptation to a changing landscape, and resilience in the face of increased competition. CEOs see social technologies as a way to harness and bring together employees, customers, and partners, but don’t have a roadmap to be able to do this.

By keeping in mind where you are in your social business evolution AND using the success factors, you’ll be able to start tackling some of these tricky issues. We’ve seen firsthand that this is not an easy journey, but it is one that you can successfully navigate. I’d love to hear how your journey is going — what stages are you in and have you encountered similar challenges? If so, how has our organization managed to move forward? Add your comments below or send me an email with details — we’re always looking for more case studies!

If you’d like to learn more about how Altimeter can help your organization move quickly and efficiently through the social business journey, please get in touch with us at sales@altimetergroup.com.

Why Most Social Strategies Fail

When I ask people what their social business strategy looks like, I usually get the following response, ”Oh yeah, we’re on Facebook.” The conversation continues apace:

- Twitter account…check.
- YouTube videos….yup.
- People who seem to know what they doing with those accounts…kinda.
- Metrics….Likes.

But that isn’t a strategy – it’s a series of tactics. Having a Facebook page is like having a telephone — it’s a tool that needs a purpose. What you DO with Facebook to meet customer expectations and attain business goals lies at the center of a coherent social business strategy.

My colleague Brian Solis and I are in the midst of conducting research on what makes a good social business strategy and a key finding is that as companies evolve their social initiatives, the efforts get disconnected from business goals. So while the company grows in its social media efforts, strategic focus, with a clear goal in mind, falls to the wayside.

This isn’t about waiting until companies have reached a stage of “maturity” before they are deemed to be successful. Rather, we found companies thriving at every stage of social strategy evolution. The key is coherence, where the business goals, executive support, social business capabilities, and the value created by both internal and external social initiatives all work together in harmony.

Here’s an example: one company we spoke with focuses most of their social efforts on developing their Facebook presence. The company rarely replies or engages with people who post on their page. On the surface, you might dismiss this company as not “getting” social media because they don’t actively engage in a two-way dialog.

But in so many ways, their strategy is far more coherent than companies that blindly engage for the sake of engagement. That’s because they are very clear about the purpose of their Facebook presence, which is to showcase the personality of the company. While they enjoy having millions of fans, the key business metric they track is reputation, which is used across all aspects of the business. On a daily basis, they ask their Facebook fans, as well as people in other channels, how they are doing on delivering their products, and if they are doing so in an environmentally sustainable way. They can then compare which channels are effective at driving their goal of improving reputation.

So how can you tell if your social business strategy is successful or failing? One way is to look across the elements of your social strategy and see if they align with each other in such a way that supports clear business goals. Are your capabilities in line with what you are trying to achieve, or have you bitten off too much and are not realizing the full potential of your efforts? Do you have the organizational governance in place to allow disparate business units to align their social efforts against a common enterprise goals, or is each line of business pulling in separate directions?

Another way to gauge where you are with your social business strategy is to take Altimeter’s Social Business Strategy Survey at http://svy.mk/QkcYRH. The aggregated results will appear in an upcoming report, and as a thank you for sharing, you’ll receive a data cut that you can use to benchmark your company against other organizations of the same size. You will receive this benchmark data after the research report is published.

The survey looks at the following topics:

  • Strategy: What are common goals and objectives? How do you measure the value of your social business efforts?
  • Organization: How are your social business efforts organized? How many people are dedicated to social business?
  • Budget: How much are you spending on external and internal social business efforts? What are you planning to spend on technologies and services in 2013?
  • Social Media Policies: What policies do you have in place? How well do employees understand those policies?

Please note that we plan to end the survey in the next week or so, so please take it as soon as possible! Also, please forward to others who may be interested or share with your social networks. Link: svy.mk/QkcYRH.

Lastly, please share why you think your social business strategy is successful — or on the flip side, what is dysfunctional about it. We’d all love to learn from your experiences!