Social Business = Social Bonding 10-17

Social Business = Social Bonding Text Reproduced from MIT Sloan Management Review A study by FedEx and Ketchum found that 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. A study by FedEx and Ketchum found that 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. Social business activities can pay off in various ways. Earlier this year, MIT Sloan Management Review and Deloitte highlighted benefits related to better market intelligence, faster customer service as well as improvements to internal operations, such as finding expertise, distributing knowledge and more effective project collaboration. (See our 2012 Special Report, Social Business: What Are Companies Really Doing?) But businesses are also reporting another more subtle benefit from social business. It’s a benefit that embraces both external and internal operations and may provide unanticipated and new advantages that can enhance the company as a whole. What we are referring to is building better relationships. And a recent study by FedEx and Ketchum suggests that this vital activity is being enhanced with social technologies. Here are more details. This past spring, FedEx and Ketchum launched its second “Social Business Benchmarking Study,” a follow up to its initial study conducted in 2010. This year’s research included both a quantitative and a qualitative portion. The quantitative segment was a survey of communication and marketing executives, mostly from firms with 2,000 or more employees with revenues over $2.5 billion. They included a mix of industries as well as firms in B2B, B2C and mixed B2B/B2C companies. There were 55 respondents to this survey, and they represented firms with familiar names such as P&G, Corning, Time Warner Cable, Southwest Airlines and Xerox. The qualitative portion was a discussion with 20 thought leaders, and included conversations with well-known experts in social business like Dion Hinchcliffe, Charlene Li and Jeremiah Owyang, among others. A key finding from the survey was social business’s role in relationships: 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. While building stronger relationships is naturally fuzzier and harder to pin down benefit than, say, “customer response time” or even something like “increased market intelligence,” improved relationships means a stronger business across and beyond the organization. (We’ve previously published on the importance of building trust with employees and customers and suppliers; see, for instance: “Unconventional Insights for Managing Stakeholder Trust,” by Michael Pirson, and Deepak Malhotra, from the July 1 2008 issue of MIT SMR.) The FedEx/Ketchum study’s report of the connection between social business and improved stakeholder relationships is supported by other researchers in the field. In a recent interview with MIT SMR, strategy and management consultant Nilofer Merchant discussed how her research found that social enhances a firm’s relationships with employees and customers. Jacob Morgan, principal of Chess Media Group, a management consulting and strategic advisory firm on collaboration and the author of The Collaborative Organization (McGraw-Hill, 2012), told us that based on his observations, the benefits of collaboration even positively impacts the quality of life of employees at home, outside of the workplace. And Dion Hinchcliffe, in his four-stage Capability Ladder of Social Business, says that the highest level in the ladder is also relationship based, what he calls the ability to “partner with the world.” Of course, it’s not going to be easy, or perhaps even possible, to tease out any kind of measurement or number on how enhanced relationships pays off. But while metrics are important in discrete projects, an attempt to measure the return on good relationships could be seen as futile. Would it be wise for Apple to determine and come up with a metric to measure the payoff from the love its customers have for the firm and its products? Some benefits, like good relationships, don’t require an ROI study. Reproduced from MIT Sloan Management Review