Social Networks at Work PromiseBottom-Line Results

By Edward Cone

Social Networks at Work PromiseBottom-Line Results

Some companies discourage their employees from using social networks at work, fearing lost productivity and wasted time. But the nation's fourth largest bank is getting ready to roll out one of its own.

Wachovia plans to introduce its social networking service to its 110,000 workers by early 2008. Like the popular Facebook service, the network will allow users to upload photos of themselves—not just corporate ID mug-shots, either—and personal information. Community-building across the vast company is one of the goals.

But the purpose of this network is all business, and the ambitions for it are grand. Think of it as a nervous system for the enterprise, one that gets more valuable the more it's used. Wachovia envisions a sophisticated knowledge-management platform integrated with multiple applications to let workers locate information— and the people who use it—simply and intuitively. Look up coworkers, and you can see their relationships to other employees and departments, and determine their availability at a given moment as well. Search for best practices on, say, a marketing or sales topic, and up come blogs and wikis written by informed employees, along with an in-house encyclopedia of all things Wachovia. "People will use it in ways we can't imagine," says Pete Fields, director of enterprise Web services for the e-commerce division of the Charlotte, N.C., bank.

Corporate social networks are looking very much like the Next Big Thing. The buzz around consumer sites like MySpace and Facebook, along with the popularity among business users of the cross-company contact directory LinkedIn, helped prepare the ground for these new enterprise nets, but their relevance goes way beyond hooking up like college kids or resume-swapping with someone you think you met once at a conference. The software lets people join and form online groups, list their interests and expertise, post text and pictures and all manner of data, communicate privately or openly with each other, and have all their postings tracked and analyzed and made visible on a single screen across an organization.

This is powerful stuff. The idea is that it will boost top and bottom lines by providing a clear understanding of who knows what, and who knows whom, within a company and among its business partners. Making it easy for people to get together online and off, and harnessing the energy and information unleashed in recent years by so-called Web 2.0 tools, is supposed to advance core business tasks including sales, marketing and knowledge management. Early adopters range from the U.S. intelligence community, which plans to launch a cross-agency social network in December, to major players in the pharmaceutical industry, where drug discovery is being driven by knowledge-sharing across companies, and presidential campaigns that count on social networks to raise money and motivate voters. Investors in companies contending for marketshare in the increasingly crowded field include Cisco and Netscape co-founder Marc Andreesen.

"Social networks improve the ability of people to do their work," says Burton Group analyst Mike Gotta, who expects social networking to be a proven contributor to corporate revenue growth, profitability and innovation within five years. The direct payoff is expected to come from making sales and other processes more efficient. The technology also allows for better employee relations and human capital management, Gotta says, appealing to younger workers and offering them access to mentors and training. Research from enterprise social-net vendor SelectMinds claims users are seeing quantitative and qualitative results in terms of new business generation, productivity, retention and branding.

It's enough to make anyone's hype-meter start to twitch. Quantifiable results are thin on the ground, and much of the expected payoff depends on intangibles such as relationships and culture that are hard to measure. But the sense that something big is happening is widespread. The rise of enterprise networks reflects current thinking about the ways companies function beyond the traditional organizational chart and the nature of interactions outside management hierarchies (see "Informal Organizations").

It says something about the flattening of business structures, and the Web-driven recognition that talent and expertise are often more widely distributed across groups than previously understood. But there is more to the story: "People are recognizing the value of relationships and understanding that the ability to see objects in context is more powerful than just linking to the objects themselves," says Eric Miller, president of knowledge management company Zepheira and a former head of the Semantic Web Initiative for the World Wide Web Consortium at Massachusetts Institute of Technology.

Tying together worker-generated applications like blogs and wikis, and allowing employees to map categories of information themselves, he says, "transforms the way enterprises share, collaborate and exchange knowledge, providing a huge competitive advantage. It will be a differentiator among businesses in the next three or four years."

Next page: Friend of a Friend

Friend of a Friend

Friend of a Friend

Antony Brydon is looking for the shortest route to Bill Gates.

The cofounder of social networking company Visible Path, Brydon is demonstrating a specialized service that incorporates his firm's technology into the Hoover's corporate information database. It's a little like playing Six Degrees of Separation, with Gates as Kevin Bacon.

Brydon types "Bill Gates" onto the screen. Two names pop up, each with a numerical ranking. These are people who have relationships with Brydon and Gates, one an employee of Visible Path and the other an investor in the company. The rankings indicate the strength of their connections to the two men, determined by a set of algorithms that analyze communication patterns between individuals and companies.

Brydon knows you don't sell to Microsoft by contacting its chairman, but he's making a point about reaching individuals within a targeted business as he gives the live demo of his software. The idea is that finding people who can introduce you to the right contact for a sales or recruiting call should give you a measure of credibility, or at least access, greater than what you get from a cold call. "Companies have large, documented business networks that they have never synthesized and aggregated and made accessible to their workers," he says. "Understanding that network, and systematically managing and applying it, lets you take advantage of your relationship capital." Visible Path uses information already on tap by integrating with a host of existing business applications, including popular customer relationship management and collaboration packages from big-name vendors including Oracle and Salesforce.com. Another way to measure and understand relationships is the mapping system used by social-net company Leverage Software. The company's People Map application displays humanoid figures within a circle, identified by color-coding for job function and by distance from each other on the map to show the closeness of their relationships or interests.

Leverage allows searches via a variety of parameters, including tagging (identifying words or phrases added by users) and rating systems. The benefits, says Leverage CEO Mike Walsh, include smoother sales and research processes, as well as talent identification within a firm. "Our focus is people finding people, and finding information," he says. "It could be someone who can get something done for you, or someone who is a hero within the company, or a hidden talent." Early users of Leverage products, he says, include a large hotel chain and major technology and pharmaceutical companies. There's a host of competitive vendors and offerings in the social networking field, including products and services from small, specialized companies and line extensions from established enterprise giants including IBM and Oracle. Wachovia is building its social network on Microsoft's Office SharePoint Server, which will make information from business applications accessible to network users. "Microsoft has a relatively rich technology offering, with natural integration across different product sets," Fields says. "Desktop and productivity tools are still so Microsoft-centric that it made sense."

The elephant in the room, of course, is Facebook. The privately held company says it has no plans to introduce a behind-the-firewall product for the enterprise, although it is paying developers who come up with useful applications on their own. Many companies have thousands of employees connecting to each other of their own volition on the service. While businesses may be reluctant to put business information on a network they don't control, they still recognize Facebook as an arbiter of Web cred. Says Fields, "A bright 26-year-old MBA will be seeing the tools we offer and comparing them to what they use in their own home, and they compare well." Brydon at Visible Path sees room for interchange between Facebook networks and private-label social nets within companies. "The two could be complimentary," he says. Analyst Gotta says Facebook may be appropriate for small to midsize companies, while its community-building strength may appeal primarily to larger firms, which could federate it with software that offers enterprise-ready security and privacy, along with specialized analytic tools and other features.

For CIOs, Gotta says, "The balance between building a better community with due diligence, security, and identity is important." For users, it's a question of weighing what they use against what their employers put in front of them, meaning corporate networks have to offer something, such as security or analytics, that Facebook doesn't in order to be taken seriously.

Next page: Expect the Unexpected

Expect the Unexpected

Expect the Unexpected

A funny thing happened when Deloitte Touche Tohmatsu set up a social network to let former employees keep in touch with each other and the firm: People started connecting in ways the company hadn't anticipated.

Deloitte had created an alumni network to play the talent market—hiring good people back into the firm brings in proven quantities who don't have steep learning curves—and as a business development tool, since alums at other companies might be inclined to use Deloitte's services. Originally designed as a Web portal, the site attracted about 100,000 registered users, outside and within the company. This summer, using software from vendor SelectMinds, it added social networking capabilities that let users build their own networks and communities.

The expectation was that users would group themselves around their areas of business practice and expertise. They did—but they also formed social groups on single parenthood, hobbies and other personal attributes. And that, says Steve Collichio, national technology director for Deloitte Services, is a good thing. "It fits into our strategy of giving alums a reason to come to the portal, to stay connected to us—and more importantly, to connect with people and each other. It gives them a chance to organically build their own networks, and gives us chance to do community involvement with targeted events."

In addition to its alumni network, Deloitte has begun adding social networks behind its firewall, using Microsoft products to create Facebook-style environments for its employees. Deloitte's knowledge management team has been heavily involved in the conversations about social nets. Knowledge management systems costing millions or tens of millions of dollars have proved disappointing at many companies, with workers reluctant to use rule-bound software and share their hard-won expertise. "It's been a struggle to make them work," Collichio says. A key goal for social nets, he says, is to "crack the nut" of knowledge management by identifying individuals who "know everybody," and figuring out how to tap into their relationship webs.

A certain open-endedness and willingness to experiment are evident at many companies in the dawning days of enterprise social nets (see "Building the Enterprise Network," page 31). Specialized networks for, say, alumni of a school or company, retirees or women on family leave often pave the way for broader and deeper uses of the technology. Dow Chemical, another SelectMinds customer, is scheduled to launch a social net in December intended to address workforce planning issues in a tight labor market, with a focus on retirees, alumni and diversity. But even before the site goes live, Dow is finding that the uses of social networks appear "almost limitless," says Kevin Small, leader of Dow's Global Resource Management Center. Different divisions from across the enormous company are approaching him, looking for business development opportunities, marketing help, continuity across a newly reorganized European customer-service organization and so on. "They all make good sense in hindsight, but it's not what we anticipated," he says.

So far, anticipation defines this market, and expectations are high. "If companies keep social networks out, they will be doing a significant disservice to their bottom lines," Small says. "This is a natural progression, especially with the generation that's entering the workforce— connectivity and connection to the company are primary drivers for them when accepting a job. I think we will reap great benefits from going down this path, even if we don't know what they all are yet."

This article was originally published on 10-08-2007