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How Social Businesses Succeed


October 22, 2012

By Phyllis Fair and Tyler Durham

In just a few short years, social media has revolutionized the way that we communicate, build relationships and obtain information. Organizations must adapt to these changes to succeed.

Two years ago, FedEx and Ketchum collaborated on our initial 2010 Social Media Benchmarking Study. Since then, organizations have evolved from primarily using social media as a platform to raise awareness about their products and services. They are becoming social businesses, leveraging social technologies and strategies to transform interactions with their customers, employees and other stakeholders to support goals and generate value.

This transformation impacts organizational structure, hierarchies and culture. Companies must be more adaptive and responsive to this changing marketplace, and organizations that are becoming genuine social entities have an inherent competitive advantage.

From the inside out

Ketchum and FedEx recently presented our second Social Business Study, which focuses on the impact of social tools on organizations. We surveyed 55 companies and conducted 24 follow-up interviews to better understand how companies leverage social business. The study also included interviews with six thought leaders at the forefront of the social revolution on emerging trends in social business. The research revealed four key findings:

1. The social business revolution is here. The impact, value and reach of social tools has expanded beyond the realm of consumer and brand management, and is transforming organizations into social businesses. 

While brand and consumer awareness is still top of mind for companies, they are putting a stronger emphasis on building relationships with stakeholders. Today, organizations need to earn their business through trust and adjust to their stakeholders’ expectations.

For example, Brian Solis, principal at Altimeter Group and one of the thought leaders who contributed to our study, says that a new type of consumer is evolving.

The “connected consumer” fully integrates social media into his or her life and, as a result, his or her decisions influence others in different ways than those of traditional consumers. Organizations need to be prepared to meet the expectations of this fast-growing segment through social tools.

Aon’s “Pass It On” program is a great example of a social business program that combines elements of employee engagement, community service and client partnerships. Since October 2011, three global teams composed of Aon colleagues in the Asia Pacific region, EMEA and the Americas have been competing for points by submitting Aon-related photos, videos and stories covering various aspects of the company, including client success stories on local community-service initiatives.

In seven months, more than 5,200 photos have been uploaded to the public Pass It On website (aonpassiton.com). The program empowers colleagues to pass on what it means to be a part of Aon through their knowledge, service, values and client expertise, while building their reputation with clients and communities.

2. Organizations are going social on the inside. Organizations are increasingly leveraging internal social tools, impacting collaboration, culture and innovation.

Of the companies who use social media to engage employees, 85 percent reported increased employee participation in their social business efforts over the past year. These companies recognize that employees are often their most passionate and credible brand ambassadors, and they are designing communications strategies to reflect that reality.

Social media tools facilitate greater collaboration and knowledge sharing, stronger innovation and increased engagement among employees. Social tools also allow companies to strengthen interpersonal relationships, share expertise, foster discussion and encourage participation in a program or initiative.

In a recent project, Ketchum Pleon Change supported a Fortune 500 company’s efforts to engage employees around the company’s Olympic sponsorship. As part of this support, the company built an Olympic social hub that provided employees with opportunities to showcase stories about their athletic endeavors, interact with Olympic athletes and learn about their company’s involvement in the London 2012 Olympic Games. These efforts proved to be highly successful, as employees reported increased pride and excitement about the company, and the Olympic hub received more than 18,000 page views in the United States alone.

3. Social ownership is moving to an “orchestra model.” Social media “ownership” is expanding beyond marketing and communications to business leaders, employees and even consumers.

In 2010, companies were still trying to determine the best structure and approach to lead social media initiatives. Since then, the whole notion of social media “ownership” has changed.

Companies reported moving away from centralized ownership of social media to a matrix structure, with “counselors” operating together in “social councils” that often include business leaders as well as communicators.

In this new structure, the communications and marketing function still has a vital role as the “content strategist,” or conductor, coordinating the content and ensuring a consistent overall brand experience across all social channels.

FedEx also takes a matrix approach to social business ownership, with representatives from a variety of teams providing input and support to ensure that our efforts are coordinated. FedEx treats social business as a practice to support business objectives rather than just as a communications channel.

For example, FedEx supports our investor relations team by using StockTwits, a micro-blogging platform for the investor and analyst community. This has enabled FedEx to expand our financial story beyond the earnings calls.

4. Businesses are becoming more flexible and adaptive. Organizations are strategically adopting social tools to listen to, respond to and engage with their stakeholders and co-create value.

Social tools allow organizations to proactively listen to their stakeholders and to respond, adapt and innovate in real time. This means that they are able to deliver desired products and services on pace with a continually evolving marketplace.

While some companies continue to focus on traditional listening methods such as mentions, Likes and follower counts, others have developed listening as a strategic capability that goes much deeper.

Organizations that listen effectively gain profound insights into who their stakeholders are, what they need, how they buy, who they influence and how they want to communicate.

Communication preferences continue to evolve as users become increasingly more mobile and want complex information communicated at a glance. Strategic listening allows companies to engage stakeholders via the channels they prefer.

To this point, 59 percent of the companies surveyed in our study are reaching out to internal and external stakeholders through mobile platforms, and nearly eight in 10 companies are incorporating more visual elements, such as infographics, into their social communications.

However, listening is only as good as the response. Companies that listen well must also develop the capabilities to quickly address any needs and issues that emerge, which isn’t an easy task.

One example that illustrates this point is from Southwest Airlines. While in the air, one customer tweeted that if the company would acknowledge that the flight attendant he had was the best in the world, then he would become a loyal customer for life. By the time he landed, there was a party waiting at the airport with a cake and a sash honoring the flight attendant, along with a contract “committing” the customer to a lifetime of loyalty.

Becoming social

The revolution is just beginning. The following points summarize key takeaways from the study:

• Social businesses are looking beyond “connecting” with people and are focusing on building meaningful relationships with important stakeholders. To do this, organizations must develop a strong capability to listen to and understand their internal and external audiences.
• Successful social businesses must trust and empower employees and allow increased transparency. Achieving this goal requires strong change management.
• The marketing and communications function coordinates the organization’s messages and goals into a unified voice across all channels.
• Companies need to have structured processes in place while remaining flexible in order to adapt to and respond to their stakeholders in real time.

Phyllis Fair is a communications adviser, global communications, at FedEx Services (www.fedex.com).
Tyler Durham is a partner at Ketchum and is managing director of Ketchum Pleon Change (www.ketchum.com/change).

 



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