Report shows social companies make more money

A new report by McKinsey shows that ‘fully networked enterprises are not only more likely to be market leaders or to be gaining market share but also use management practices that lead to margins higher than those of companies using the Web in more limited ways.’ Or, in non-consultant speak – by being social inside and outside your company, you’ll make more money, and be able to get higher profits.

Networked enterprises are using collaborative technology and techniques to connect internal employees, and also to improve communication with customers, suppliers and partners. And the report also notes that the trend for using these tools is following an S-curve, which means rapid adoption by a lot of companies as they realise they can earn more.

Want to become social?

There are a couple of elements missing from the McKinsey report summary – firstly, it’s not just enough to roll out some new social technology. It won’t do anything for your business just sitting there, and that includes customer social outreach like blogs, social media, video sharing etc.

Ideally you should plan for the best and most effective social technologies which will have an impact on your employees and your customers, and the ways in which they will need to be encouraged, maintained, and evolved over the time. That might sound scary, but it’s actually a part of the process which I love – essentially putting together what your customers want, what your employees want, and how that can create revenue for your business. And if you’d like some assistance, then look for someone with experience of rolling out new social technology and knowledge transfer.

Then there’s the willingness to experiment, take risks, and also embrace the occasional failure. Too many companies are paralysed by fear of failing, when any social iniative carries an inherent flaw which you’ll never get rid off – dealing with humans! The effective route is not to avoid collaboration and social initiatives, but to start simple and plan 2 or 3 initiatives in the short term. One of those new ideas which takes off will more than compensate for the others – and in addition to productivity and revenue increases, it’ll also pave the way for more successes in the future, as long as you continue to evolve and progress it.

There’s an almost overwhelming abundance of opportunities out there, and keeping it simple and effective is key, with the agility to help it evolve and change your business for the better.